May 26, 2015 / 1:20 PM / 3 years ago

Nothing will stop Israel's natural gas development -Netanyahu

JERUSALEM, May 26 (Reuters) - Israeli Prime Minister Benjamin Netanyahu vowed to further develop offshore natural gas fields after the country’s anti-trust regulator said he would step down to protest against the lack of competition in the gas sector.

Netanyahu is under pressure to strike a balance between moving ahead with plans to develop the large Leviathan gas field while creating competition, since Leviathan is owned by the same firms as the nearby Tamar site that started production in 2013. The fields are off Israel’s Mediterranean coast.

He noted that there is an outline for a deal with the gas exploration companies, which did not go far enough for David Gilo, Israel’s anti-trust commissioner.

“Not everyone agreed, unfortunately” Netanyahu said at the outset of a cabinet meeting on Tuesday, referring to Gilo. “But we are moving forward.

“I will not let any consideration, any pressure, any populist moves prevent the flow of gas to the State of Israel,” he said. “We will extract this gas from the depths of the sea.”

Gilo, who has been pushing to open the energy sector to competition, said on Monday he would step down in August, potentially lifting the pressure on exploration companies Noble Energy and Delek Group.

Noble and Delek own 85 percent of Leviathan, which has an estimated 22 trillion cubic feet (622 billion cubic metres) of reserves. Production had been expected to begin in 2018 following an initial investment of around $6.5 billion but development has been frozen.

Gilo caused an uproar in December when he ruled that Noble and Delek may constitute a monopoly over their control of Tamar and Leviathan.

Yossi Abu, chief executive of Delek Drilling - a unit of Delek Group - said there needs to be a regulatory environment that will enable the development of existing discoveries and exploring for new ones.

“There exists significant potential for further oil and gas discoveries ... and we should not miss this historic opportunity,” Abu told an energy conference.

“Israel can produce a real market and not an artificial one, not a gas market run by the regulators,” he said, adding that Israel can become a regional gas superpower and fill state coffers with hundreds of billions of shekels.

Similarly, Energy Minister Yuval Steinitz warned that Leviathan must be developed soon, since sanctions on Iran could be removed which could harm potential export deals of Israeli gas. Allowing investments, he said, was critical. (Reporting by Steven Scheer, editing by David Evans)

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