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Business

Israel PM backs Leviathan deal

TNE-DF_2016-02-15_15-1
2 years ago

Netanyahu encourages further gas exploration

BY STEVEN SCHEER

Reuters

JERUSALEM – Prime Minister Benjamin Netanyahu told Israel’s top court on Sunday the country must forge ahead with developing a large natural gas field, with billions of dollars worth of potential exports, for both economic and security reasons.

In an unusual step for an Israeli prime minister, Netanyahu testified, at his own request, in the Supreme Court to defend a framework gas deal after opposition parties and non-government organizations filed petitions to block plans to develop the Leviathan field off Israel’s Mediterranean coast.

Critics, including the anti-trust authority, have argued that planned control of the country’s gas reserves by one consortium will limit competition and keep prices high.

Under the deal, Texas-based Noble Energy and Israel’s Delek Group, which discovered Leviathan in 2010, would retain control of the field but are being forced to sell other, smaller assets such as the nearby Tamar field that began production in 2013.

Netanyahu argued the blueprint provided major opportunities for Israel’s foreign relations and that any delay in its implementation could lead to the deal’s collapse and cause “long-term significant damage” to the country’s security and economy.

Holding estimated reserves of 622 billion cubic meters, Leviathan will cost at least $6 billion to develop. It is meant to begin production by 2020 and supply billions of dollars worth of gas to Egypt and Jordan, and possibly Turkey and Europe.

Egypt and Jordan are the only Arab states to have signed peace deals with Israel. Gas exports could help shore up ties between Israel and its neighbors to the east and south.

“There is no realistic alternative to the gas deal,” Netanyahu said. “If we reverse course, we will fall into the chasm once and for all.”

After years of political infighting Netanyahu signed a framework deal that gave long-awaited approval for Leviathan’s development.

Netanyahu had defended the deal in an affidavit to the Supreme Court last week and requested appearing in front of the judges before they make their final, binding ruling.

Last year, parliament narrowly approved the deal but the anti-trust commissioner resigned in protest. The deal still needed anti-trust approval or for the economy minister to sign a waiver to bypass the Anti-Trust Authority.

The minister, Aryeh Deri, refused and ultimately resigned and Netanyahu took over as economy minister. In December, he invoked a never-before-used clause in the anti-trust law that allows for decisions of the Anti-Trust Authority to be overridden in the name of security and international diplomacy.

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