By John Reed / FinancialTimes.com
Israel began pumping its first offshore natural gas at the weekend in a move it is hoped will boost economic growth and transform the country’s energy security in coming years.
Gas from the Tamar field, the smaller of Israel’s two biggest offshore reservoirs, began to flow at 4 pm on Saturday, the Ministry of Energy and Water Resources said.
It said the gas would take about 24 hours to travel from the well, about 90 km off the coast of Haifa in northern Israel, via pipeline to an onshore terminal at Ashdod in southern Israel.
Benjamin Netanyahu, prime minister, said the launch of production at Tamar marked “an important day for the Israeli economy”.
“On the Festival of Freedom, we are taking an important step toward energy independence,” Netanyahu’s office said on Saturday, referring to the week-long Passover holiday, which ends on Monday. “We have advanced the natural gas sector in Israel over the last decade, which will be good for the Israeli economy and for all Israelis.”
The Tamar project cost $3 bn, took four years to develop, and is the largest privately funded infrastructure project in Israeli history.
The gas will be pumped ashore via a 150 km-long undersea pipeline, one of the longest of its kind in the world.
The Bank of Israel estimates that the Tamar field will contribute a percentage point of the country’s GDP growth this year, which is estimated to reach 3.8 percent.
Israel’s gas reservoirs at Tamar – which were discovered in 2009 – and the larger, undeveloped Leviathan make Israel’s offshore finds among the world’s biggest in the last decade.
Mr Netanyahu’s new government, formed earlier this month, is expected to decide soon on the report of the Tzemach Committee, published last year, which recommended that Israel export up to 500 bn cubic meters of its gas and save at least 450 bcm for its domestic needs.
The two biggest shareholders in Tamar and Leviathan, Noble Energy and Delek Energy, are hoping for permission from the government to export a significant portion of the gas they extract as they say demand for gas in Israel is too small to cover the estimated $3 bn to $4 bn they would need to develop Leviathan.
The companies are studying options including exporting liquefied natural gas via pipeline to Jordan or Turkey, with which Israel recently ended a long diplomatic estrangement when it apologised for the 2010 Mavi Marmara flotilla incident in which eight Turkish citizens and one Turkish-American were killed.
In a statement on Saturday the investors in Tamar said that the project would save the Israeli economy about $13 bn a year in energy costs.
Yitzhak Tshuva, owner of the Delek Group, said that the launch of production at the field marked an end to Israeli “slavery” and dependence on foreign energy sources. “This is the beginning of a new era that will change the face of the Israeli economy,” he said.