ISRAEL is losing one billion shekels ($258 million) each month it waits for natural gas to arrive from its recently discovered offshore fields, the chief executive of Ratio Oil Exploration said on Sunday.
Gas production is set to soar in Israel in the coming years, but its first field, Tamar, discovered in 2009 with estimated reserves of 9.7 trillion cubic feet (tcf), is due online in April.
Since losing gas imports from Egypt earlier this year, Israel has had to turn to more expensive fuels, like diesel and fuel oil, to generate electricity. This, together with the delay in taxes and royalties the government is expecting from gas production, is taking a toll, said Ratio’s Yigal Landau.
“(The loss of) tax income, of an energy alternative that costs a quarter of what the state is currently paying, and income from foreign currency, costs the country more than one billion shekels every month,” he said at an energy conference in Tel Aviv. Ratio is not a partner in the group developing Tamar, but it holds a 15 percent stake of the much larger Leviathan project nearby.
Leviathan, estimated to have 17 tcf of natural gas, was the largest offshore discovery of the past decade, and it will require $15 billion to develop, Landau said.
The Leviathan consortium, led by Texas-based Noble Energy , is looking to bring in a major international energy company to help in its development.
Australia’s Woodside Petroleum has submitted a bid to buy up to a 30 percent stake in Leviathan. Israeli media has reported that Russia’s Gazprom was also a leading contender in the process.
Noble Energy has a 39.66 percent share in the field.
Israel’s Delek Group, through subsidiaries Delek Drilling and Avner Oil Exploration, has a 45.34 percent stake.