This story is from the Washington Post, By Tova Cohen
TEL AVIV - Israel can look forward to long-term energy security after the discovery of a huge offshore natural gas field, but obstacles lie in exporting its output, experts said Thursday.
Israel will find it hard to secure foreign buyers as gas consumption in Europe weakens while competition stiffens in the expanding Asian market, they said.
Texas-based Noble Energy and its Israeli exploration partners on Wednesday described the Leviathan prospect - 80 miles off the Mediterranean port of Haifa - as the world's biggest gas find in the past decade.
Leviathan is estimated to have 16 trillion cubic feet of gas. Tamar, a nearby site being drilled by Noble and Israel's Delek Energy, was the largest gas find in the world in 2009, at 8.4 trillion cubic feet.
"A world power," read a headline in Israel's mass circulation Maariv newspaper, describing the country's new energy muscle.
But the experts pointed to a global glut in natural gas and noted that unlike oil - which is sold on global markets - gas is geographic and needs a specific buyer.
"It's not a great time for Israel to enter a lot of the markets," said Brenda Shaffer, an energy expert at the University of Haifa. "European consumption is going down, new suppliers are coming on. I'm not sure there's a buyer waiting by the door at this point."
Shaffer noted that larger amounts have been discovered onshore, where it is also cheaper to produce than in deep water.
Even if the hurdles to export prove insurmountable, the gas at Leviathan will give Israel, which has always been dependent on imports, long-term energy security.
Amir Kahanovich, a macroeconomist at the brokerage Clal Finance, estimated that the gas at the site could be worth $95 billion. "A country that supplies itself with a large part of its energy is more economically stable [and] less sensitive to swings in energy prices," he said.
Production from Tamar is slated to begin in 2013, and that gas is being targeted for local consumption. Leviathan, its developers said, won't be ready until 2017.
The Leviathan find raises the chances of other major discoveries in the region - off the shores of Cyprus, Lebanon, Egypt and the Palestinian territories.
The Israeli partners have talked of exporting through a pipeline or as liquefied natural gas. Shaffer said that the chances of the gas being sold to Europe were small and that probably the most viable option would be using existing facilities in Egypt.
"Asian markets are growing in [liquid natural gas] imports, but Israel would have to compete with Qatar, Russia and Australia, which are already producing LNG," she said.
Israel, Shaffer said, needs to develop technologies to expand the use of natural gas beyond generating electricity and into transportation and chemicals, as happened with oil, which was initially used to make kerosene for lighting.
"I've worked in countries that depend on natural resources and dreamed of developing a high-tech-based economy," she said. "Israel has this high-tech-based economy and wants to become a resources exporter."