Israel poised to earn $50B in gas sales to Europe

Israel could rake in billions in revenue if it can just ramp up production.

By Lauren Marcus, World Israel News

Israel is poised to earn some $50 billion in tax revenues and become a key player in the world energy market, as Europe seeks to obtain natural gas from other sources after cutting off purchases from Russia, says a senior executive in an Israeli energy company.

Yossi Abu, CEO of the NewMed Energy corporation, told Israel Hayom that the Russian invasion of Ukraine and ongoing global financial downturn have put Israel in an advantageous position.

“The world economic crisis dramatically increased the importance of Israeli natural gas, not only for Israel but also on the regional level – for Jordan and Egypt,” Abu told Israel Hayom.

“If we hadn’t made these discoveries, Israeli citizens would be paying at least 60% more for their electricity bill.”

According to Abu, “in Europe, the price of electricity increased…by 300%, because the price of natural gas increased dramatically. In Israel, on the other hand, the price of natural gas is roughly $4.5-$5 per heat unit, while in Europe and Asia it’s $30. Today Israel has some of the lowest natural gas prices in the world, and this is reflected in the citizens’ electricity [bills.]”

Abu’s company partners with the Israeli government on the extraction and production of natural gas from offshore oil fields, under a model which sees Jerusalem collect some 50 percent of the revenue from energy exports.

He urged the Israeli government to ramp up natural gas production, as such a move could prove extremely lucrative for Israel’s financial future.

“If we’re talking about supplying 10-20 BCM per year of gas to Europe for 20 years – we’re talking about a deal of $100 billion,” Abu explained.

“The State of Israel [gets] 50% of that, without investing anything. So we’re talking here about dramatic income for the State of Israel. Natural gas is an extremely significant economic anchor.”

Israel, Egypt and Europe signed a memorandum of understanding in May on gas sales. Israel will transfer the gas to Egypt by pipeline. Once liquefied and pressurized, the natural gas will be shipped to Europe from Egyptian port cities.

Turkey is also courting Israeli cooperation to supply Europe with gas.