The Export Question: What to Do with Israeli Gas?
"In fact, the only contract that has been signed is the contract with this Jenin power station ... It is to be a 200MW power station. The problem with that project is that the power station does not yet exist, and there are no pipelines yet reaching the West Bank and no pipelines yet in the West Bank. And so I think that is a project that might take several years."
Pipeline to Jordan
"The other… option that is very easy to do is to [connect to] Jordan. The Jordanians were getting gas, like Israel was, from the Egyptians. The pipeline in the Sinai [Desert] was bombed on about 15 occasions and the supplies were stopped. The Jordanians have no supplies of gas locally and are forced to use very expensive liquid fuels for their power sector, so they are keen despite the geopolitical problems from their side," Cohen said, explaining that politically it is difficult for Jordan to buy Israeli gas but from a technical, and economic, standpoint, "it is their best, easiest, quickest and cheapest option".
To date, there have been two letters of intent (LOI) with the Jordanians. The first deal would see a pipeline going from the offshore zone across Israel to the Israeli Dead Sea. It would then require a few more miles of pipeline to link to two petrochemical plants on the Jordanian Dead Sea.
"The greater LOI was signed a couple of months ago and is more towards the north of Jordan to supply gas to the Jordanian-Palestinian power company. That is to supply greater quantities of about 3 Bcm [106 Bcf] per year of gas," Cohen said.
In mid-November, "the Jordanian ambassador to Israel was recalled back to Jordan so potentially some of these contracts may be on hold, but I have a lot of faith that although the geopolitics in that area is difficult, the power stations exist [and] there is a pipeline in Jordan – the Arab Gas Pipeline – so all one needs to do is build a pipeline to the Jordanian side and these projects could move ahead."
Pipeline to Cyprus (with an LNG Option)
Another potential route for Israeli gas is Cyprus.
"There are two options for this. One is to supply gas to Cyprus itself, although the Cypriots have discovered quite a substantial amount of gas for their own needs. They have discovered 126 Bcm," Cohen said.
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