Israel to Become Natural Gas Exporter

Israel is set to become a major natural gas exporter in the region.  Nobel Energy, a Houston based energy company, announced this week that Israel’s natural gas reserves are larger than initially thought.

Nobel said that the Leviathan block may hold 16 trillion cubic feet of gas.  It also upgraded estimates on the nearby Tamar field to 8.4 trillion cubic feet.  All together, some estimates say that the Eastern Mediterranean may hold as much as 30 trillion cubic feet, including sites such as Sarah and Mira.

“This has the potential to turn Israel into a key regional gas player, competing with the likes of Egypt,” Guil Bashan, an analyst at IBI in Tel Aviv, said by phone. “This is also a major plus for the economy and for the partners operating the licenses, which can produce value by becoming major exporters.”

Israel, which has been in several wars since it was founded in 1948, has been dependent on oil and coal imports from as far away as Mexico and Norway and has bought gas from Egypt in the past decade. Now, with the Tamar find last year expected to fulfill its gas demand for the next two decades, the country may be able to ship the commodity to Asia and Europe. (Business Week)

Drilling is expected to commence later in 2010.  Israeli company Delek Group is a major investor in the project.  Delek shares, trading on the Tel Aviv Stock Exchange, were up 13% on the news to 876.5 Shekels per share.

The gas production and exports will help add diversified strength to Israel’s economy.  Israel can expect an increase in investment, jobs, tax revenue, and GDP from this project.