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Knesset vote on gas deal postponed as government struggles for majority

[ssba]

Having been unable to secure a majority, the government last night postponed a Knesset vote on handing the cabinet authority to approve a pivotal agreement with the two principle investors in the development of Israel’s natural gas.

The Leviathan and Tamar natural gas fields are thought to contain around 800 billion cubic metres in gas, enough to supply the Israeli market for a century. Israeli company Delek Drilling and American firm Noble Energy hold controlling stakes in both fields and have been largely responsible for their development so far. Deals have already been agreed to supply significant quantities of gas to Jordan and Egypt.

However, further development was thrown into doubt in December 2014, when Israel’s Antitrust Regulator, David Gilo recommended ending the dominance of Noble and Delek. The two companies indicated that they may end development entirely and concerns were raised over how this might impact wider investment in the country. Following lengthy negotiations, Israel’s government recently announced an agreement with Noble and Delek, overlooking their “monopoly” in return for selling holdings in Tamar and two smaller fields. Opponents accuse the government of selling Israel’s natural resources to private interests.

Gilo has refused to approve the deal and so the government is seeking to circumvent his authority. Economy Minister Aryeh Deri has refused to sign the provision to make this happen, forcing the government to turn to the Knesset for such approval. With a vote scheduled for yesterday, the government, which enjoys a razor-thin majority was unable to muster the required support with three ministers refusing to vote due to a previously declared conflict of interest. Meanwhile, Yisrael Beitenu, which had been expected to support the government, refused to do so.

As a result, the vote has been postponed to an undefined later date. Writing in Maariv, Ben Caspit says that the non-vote exposes the government’s vulnerability and that having “built this magnificent house of cards,” Prime Minister Netanyahu “is now watching it collapse.”