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June 5, 2019

Israel gas supply is set to exceed domestic demand and has export potential

For the first time in late 2019, it is forecast that Israeli gas production will balance with its total consumption.

By GlobalData

Israeli gas demand has doubled compared to 2010 consumption and is forecast to increase significantly, to more than 850 billion cubic feet (bcf) [24 billion cubic metre (bcm)] in 2030. This is mainly due to Israeli government commitments to COP21 environmental targets.

Israel gas supply

Besides the increase in gas consumption, the country has gone through an energy production revolution owing to new discoveries of natural gas resources such as the Tamar and Leviathan fields in the past decade.

GlobalData’s forecast shows that when the existing discoveries of Leviathan and Karish start producing, gas production in Israel will significantly exceed the expected demand and it will be necessary to export surplus gas. However, Israel’s precarious geopolitical situation makes its position more sensitive in the existing highly competitive energy market in the region.

Neighbouring countries also have major gas discoveries such as Aphrodite in Cyprus and Zohr in Egypt, reducing the need for Israel’s gas in local markets.

Figure: Israel gas production versus domestic gas demand

Source: GlobalData Oil & Gas Intelligence Center

Currently, Israel’s remaining recoverable gas reserves are estimated to be about 26.2 trillion cubic feet (tcf) (750 bcm), approximately 62 times greater than country’s gas consumption in 2019.

For the first time in late 2019, it is forecast that Israeli gas production will balance with its total consumption owing mainly to Tamar, which started in production in 2013 supplying around 950 million cubic feet per day (mmcfd), and the ramp-up of Leviathan Phase 1A, which will supply around 200 mmcfd to the domestic market.

Israel’s gas production is anticipated to exceed its demand by 80% in 2020 due to production from Leviathan 1A. This will enable Israel to become a gas exporter in the Eastern Mediterranean. Karish, with recoverable reserves of 1.7 tcf (60 bcm), is also under development and is expected to start supplying the domestic market in 2021.

Export agreements to Jordan and Egypt have already been agreed for the Leviathan Phase 1A gas volumes. Israel will export 106 bcf (3 bcm) gas per year to Jordan starting from 2020 through a 65 kilometre (40 miles) pipeline. However, Israel will also need access to additional markets otherwise it will not be able to export large quantities of natural gas.

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