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Israel Just Started Exporting Natural Gas…To Jordan

Oil Barrels

Israeli firm Delek Drilling – the part of Delek Group developing Israel’s offshore gas fields – has started exporting natural gas to Jordan in what are Israel’s first gas exports ever, AFP reported on Thursday, citing a company spokeswoman.

The exports had started in January this year.

In early 2014, Delek said that it had signed an agreement to export natural gas from the Tamar project to consumers in Jordan, and two Jordanian companies, Arab Potash Company and Jordan Bromine Company, had signed deals to buy Israeli gas that would serve them in their plants located on the eastern bank of the Jordanian side of the Dead Sea. Back then, the supply was expected to begin in 2016, and to last for about 15 years. The determined gas price was linked mostly to the prices of Brent and includes a “floor price”, and was likely around US$500 million, the Israeli company said in 2014.

According to Israeli newspaper Haaretz, Israel and the two companies had decided not to announce the start of deliveries due to the sensitive topic that Israel is doing business with Jordan. Although Jordan and Israel signed a peace treaty in 1994 – which made Jordan the second of just two Arab countries with a peace deal with Israel, after Egypt – the peace is unpopular with Jordanians because nearly half of them are of Palestinian origin.

Related: As Non-OPEC Compliance Hits 60%, Oil Prices Remain Stagnant

Still, resource-poor Jordan has few other options for energy supplies.

In September 2016, Delek also signed a deal to export natural gas from the giant Leviathan gas field to the National Electric Power Company of Jordan for a period of 15 years.

Delek, one of the partners developing the Leviathan gas field together with Houston-based Noble Energy, targets first gas sales from the field for the end of 2019. Last month, the partners in the Leviathan field ratified the final investment decision for the first phase of development which entails gross capital investment of US$3.75 billion.

By Tsvetana Paraskova for Oilprice.com

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