Israel Said to Plan Pipeline for Gas Exports to Jordan

Israel, seeking to tap recent natural-gas finds for export, plans to build a pipeline from the Dead Sea to the Jordanian border to supply its neighbor, two people with knowledge of the matter said.

The Ministry of Energy and Water Resources expects to begin work on the 15-kilometer (9-mile) link in 2015 and complete it in 2016, according to the people, who asked not to be identified because the information isn’t public. The ministry commissioned the project on behalf of U.S. gas producerNoble Energy Inc. (NBL) and a Jordanian partner, they said.

The 2010 discovery of the offshore Leviathan field, coming after the nearby Tamar find, proved a bonanza for Israel, which expects the gas to meet its needs for a quarter of a century while also enabling exports. For Jordan, which has seen fuel imports from Egypt disrupted by pipeline bombings in Sinai, deliveries from Israel would help to boost security of supply.

An Israeli Energy Ministry official, who asked not to be identified, declined to comment, while calls to Jordan’s energy minister weren’t answered. A spokesman for Noble Energy in Tel Aviv declined to comment when contacted by phone.

Palestinian Accord

Israel, which itself imported Egyptian gas until bombings cut deliveries, reached its first export agreement earlier this week, a 20-year deal to supply a planned Palestinian power station. Noble and its partners at Leviathan, the larger of the two fields, said they’ll get about $1.2 billion to send gas to the plant to be built in the northern West Bank city of Jenin.

Partners in the offshore Tamar field, which include Houston-based Noble, also are in talks to sell gas to Jordanian potash plants for 15 years for $500 million to $700 million, Israel’s Calcalist business newspaper reported last month.

Jamal Sarayreh, the chairman of Jordan’s Arab Potash Co., declined to comment when contacted last week. Noble Chief Executive Officer Charles Davidson said in November the company would prefer to export Israeli gas to neighboring countries than to the Far East, which would require seaborne-tanker shipments.

“We will be able to market more gas regionally at lower capital cost because all of these regional markets are basically using pipes, and in some instances they’re connecting the pipes that already exist,” Davidson said.

The new pipeline will start at Sdom, according to the two people. It will be an extension to an existing link that brings gas to the Dead Sea Works Ltd. chemical plant there.

The Tel Aviv Oil & Gas Index advanced 2.2 percent, the most since September, at the close today in Israel.

To contact the reporters on this story: Shoshanna Solomon in Tel Aviv [email protected]; Calev Ben-David in Jerusalem at [email protected]

To contact the editor responsible for this story: Claudia Maedler at [email protected]

 

Published by:  www.bloomberg.com