November 29, 2011 / 12:57 PM / 8 years ago

Natural gas firms call on Israel to allow exports

* Allowing exports will help develop industry, firms say

* One estimate puts potential exports at $4 bln each year

By Ari Rabinovitch

TEL AVIV, Nov 29 (Reuters) - Energy exploration companies on Tuesday called on the Israeli government to allow them to export natural gas from recently discovered reserves or risk harming the country’s fast-developing gas industry.

Gas production is set to soar in Israel in the coming decades following the discovery of some of the world’s largest offshore reserves, and the government last month formed a committee to decide how best to allocate the windfall while safeguarding Israel’s energy independence.

The committee will present its decision by the end of February.

Government officials have said they want to secure up to 50 years of reserves for Israel before allowing exports, but have also acknowledged the firms’ desire to sell gas abroad.

“We think there is a really compelling case for natural gas exports,” said Lawson Freeman, vice president for the Eastern Mediterranean at Texas-based Noble Energy, which leads a number of U.S.-Israeli exploration groups off the Israeli coast.

In the past two years, Noble and its Israeli partners discovered the Tamar field, where production from its 9 trillion cubic feet (TCF) of gas is set to begin in 2013, and the Leviathan prospect, which is nearly twice as big and due to be online around 2017.

Tamar, Freeman said, can meet Israel’s energy needs for the next 20 years.

“We’re looking at exports for Leviathan,” he said at the Israel Energy and Business Conference in Tel Aviv.

Should the government allow significant gas exports, it would draw new players and encourage further exploration, Freeman said.

Noble recently began its own studies on export options, specifically with liquefied natural gas (LNG), which will be finished in March, he said.

Noble’s largest Israeli partner, Delek Energy, said Israel is strategically located to export to both Asia and Europe, and without looking to sell natural gas abroad the industry would falter.

“To get investors to develop and lay infrastructure ... and fund projects of this type, you need to open the market spectrum, which means export, export, export,” said Gideon Tadmor, the company’s CEO.

He said countries like Bangladesh and Egypt chose not to promote gas exports and, in turn, hurt their industries.

Ohad Marani, CEO of ILD Energy, which is exploring in the eastern Mediterranean, said that should it choose to export via a few floating LNG terminals, Israel could sell 15 to 20 billion cubic meters each year, worth about $4 billion.

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