BICOM

What happened: Israel will become a major gas exporter on 1 January after Energy Minister Yuval Steinitz signed a deal to export natural gas to Egypt. Gas from the offshore Tamar and Leviathan gas fields will be exported to Egypt for domestic use and for conversion into liquefied natural gas for further export.

• Steinitz said: “Israel becomes – for the first time in its history – an energy exporter and an important partner in the regional energy market.” He said the deal: “Is the most significant economic cooperation between Israel and Egypt since the peace agreement was signed between the countries”
• 60 billion cubic meters (bcm) of natural gas will be exported from Leviathan and 25 bcm from Tamar over the next 15 years in a deal worth $15bn.
• Exports of gas to Jordan will also begin on 1 January according to a September 2016 agreement worth $10bn.

Context: In a recent article in Fathom Journal, Ezra Friedman writes: “The discovery of gas is transforming the geopolitics of the Eastern Mediterranean. Israel, long reliant on energy imports to meet national domestic energy consumption, is set to become not only energy self-sufficient but also an exporter, on a regional and – just maybe – international scale.”

• The gas deals are also a positive development for Israel-Egypt and Israel-Jordanian ties. Israel’s relations with both countries are often described as a ‘cold peace’ where strong security and high level political links have not translated into widespread economic and trade relations or extensive people to people contacts.

Looking ahead: Israel will enjoy extensive economic benefits from increased energy exports but becoming a major energy exporter will also provide Israel with additional tools in its foreign policy to maintain bilateral and multilateral relations in the region.

• As Friedman writes: “If Jerusalem continues to play a critical role in both enhancing regional security, strengthening diplomatic ties, and increasing economic interdependence with regional states, Israel may yet become both a significant as well as openly integrated member of the Eastern Mediterranean region.”