With Italian energy company Eni, the Italian government is putting together a format for cooperation between Italy, Israel and Egypt for the export of gas from discoveries in Israel and Egypt. Senior Eni managers will come to Israel this week to discuss the matter, and they will apparently meet Minister of National Infrastructures, Energy and Water Yuval Steinitz. According to a report on i24 news, which broke the story, the Italians will also meet Prime Minister Benjamin Netanyahu.
i24 news reports that the idea first arose in a meeting between Netanyahu and Italian Prime Minister Matteo Renzi in Florence on August 30. The meeting took place hours after the huge Egyptian Zohr discovery became known.
The move is only at the initial stages. The idea is that Israel, and perhaps also Cyprus, will use Eni and Spanish company Union Fenosa's's liquefaction installation in Egypt for exporting gas. I24 news also mentions that the possibility is being considered of using the existing gas pipeline between Israel and Egypt through the Sinai, which has been blown up many times by Islamic extremists.
When it was announced, the Egyptian gas discovery sent share prices in Israeli gas companies plummeting, because of fears that it would be direct competition for Israeli gas field Leviathan and hurt the Israeli gas industry while the outline plan for the Israeli gas industry was being delayed. Steinitz himself has warned against any further delay, calling the Egyptian discovery "a painful reminder" of the ups and downs of the global gas industry, and saying that the plan should be approved quickly to make it possible to develop the Leviathan field.
It now looks likely that collaboration between Eni, Israel and Egypt will go ahead, assuming of course that the outline plan is approved in Israel. This could be the reason for the pressure that Netanyahu has recently been exerting to have the plan approved and for the move to remove Minister of the Economy Aryeh Deri, who has been the obstacle to the plan, from his post in order to take over his powers and put into effect section 52 of the Restraint of Trade Law that allows circumvention of the Anti-Trust Commissioner, which would enable the private gas monopoly of Yitzhak Tshuva and Noble Energy to continue.
Published by Globes [online], Israel business news - www.globes-online.com - on October 26, 2015
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