AMMON: The Israeli press recently reported that Israel started supplying gas to its neighbor Jordan in January. While the current trade is small, Israel and Jordan have signed an additional contract for larger gas supplies, and this trade could eventually be expanded to other countries in the region.
This moderate start could have far-reaching positive consequences for the region, and it reflects the new state of relations in the Middle East, where many Arab-majority states are now openly cooperating and trading with Israel.
The gas supplies from Israel to Jordan are modest in the first stage, but they set an important precedent. The companies operating in Israel’s offshore Tamar field (the main partners are the U.S. company Noble Energy and the Israeli company Delek Energy) began exporting gas in January to two Jordanian factories operating in the Dead Sea area of Jordan.
While the volumes are currently small (approximately a quarter billion cubic meters or 8.8 billion cubic feet per year), gas trade between Israel and Jordan will expand through an additional contract from Israel’s massive Leviathan field to Jordan’s national power company (NEPCO). This contract is for 3.5 billion cubic meters (or 123.6 billion cubic feet) a year, for fifteen years, and is slated to begin in 2019.
This gas will enter Jordan through the north and connect to its gas grid, whereby it can reach multiple power plants throughout the country. Jordan’s gas grid is linked to grids in Egypt and Syria and Syria is connected to Lebanon. So, this infrastructure could eventually be used to supply gas to additional countries in the region, though, at this point, the idea remains theoretical.
The contract from Leviathan was significant enough to trigger a Final Investment Decision (FID) sanctioning the development of the first stage of the Leviathan field. Despite the current cash-strapped environment of most oil companies, the sanctioning of Leviathan makes commercial sense. Noble Energy and Delek Energy are able to take advantage of the current low steel prices and the relatively low costs of service companies.
