Infrastructures Ministry seeks gas supply proposals

The Ministry of National Infrastructures is concerned about a possible shortage of natural gas in a few years.

The Ministry of National Infrastructures today invited natural gas suppliers all over the world to submit data about the natural gas that they could supply to Israel. Among other things, the ministry is asking for a timetable for a feasibility study and the method of supply (tankers or pipeline). Israel apparently has guaranteed gas suppliers for more than ten years. The Israel Electric Corporation (IEC), Israel’s largest gas consumer, signed an eleven-year agreement to buy gas from the Yam Thetis partnership’s gas fields off the coast of Ashkelon.

IEC is also in advanced negotiations with the Eastern Mediterranean Gas (EMG) partnership to buy gas from Egypt for fifteen years, with an option to extend. One of the EMG owners is Joseph (Yossi) Maiman. On the other hand, it is also possible that in two years, after gas consumption in Israel rises, another supplier will become necessary. If Egypt has still not begun to supply gas by then, and if gas must be supplied to other consumers besides IEC, Israel will certainly need another gas supplier.

The Ministry of National Infrastructures stresses that Israel is currently getting gas from one supplier off the coast of Ashkelon Yam Thetis. The ministry says that it is aware of the advanced negotiations to buy gas from Egypt, and predicted that an agreement would be signed with Egypt. "Globes" recently reported that there were still serious problems in the negotiations between the IEC and EMC.

The Ministry of National Infrastructures forecasts a shortage of 50 billion cubic meters of gas by 2025.

Minister of National Infrastructures Binyamin Ben-Eliezer said, “Using natural gas provides a number of advantages, including lower prices and less damage to the environment, compared with other fuel (diesel and crude oil). A combination of additional suppliers will make it possible to push for the development of the Israeli energy economy, speed construction of the land-based gas pipeline, develop industry to replace the use of fuel like crude oil and diesel with gas, and add private power producers to the electricity economy.”

Gas suppliers interested in supplying gas to Israel have until early August to provide the required information.

Published by Globes [online], Israel business news - - on March 7, 2005

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