Egypt gas field discovery threatens Israeli energy plans


The discovery of a potentially massive natural gas field in Egyptian territory has the potential to wreak havoc on Israel's plans to develop its own gas fields.

Italian energy giant ENI's announcement on Sunday that it had discovered a field initially assessed at around 30 trillion cubic feet - about 40 per cent larger than Israel's largest field, Leviathan - took Israel by surprise.

For months now, the politicians, energy tycoons and activists have been warring over the "natural gas framework" that will set the rules for the companies controlling Israel's fields.

The regulatory framework agreed by the government, the Israeli Tshuva Group and American Nobel Energy, has been roundly criticised for setting prices too high and allowing too much of the gas to be exported, rather than securing supply to the Israeli market.

Supporters of the framework argued that by supplying gas to Egypt, Israel could enter the global energy markets and cement regional ties. But now that Egypt has a new impetus to develop its own gas fields and the prices are set to go down, the framework's detractors claim that those arguments have lost their purchase.

Energy Minister Yuval Steinitz, who has been trying to push the framework through the Knesset, claims the opposite. He has said that the Egyptian find is proof that Israel "cannot continue hesitating while the global situation is rapidly evolving".

The government had been planning to present the framework to the Knesset for a vote this week, but since the news from Egypt, its plans have gone awry.

On Monday, the Knesset was informed that the vote was to be postponed. The next day it was back on track - but no clear date has been scheduled.

As it is, the government is not assured of a majority, with coalition partner Kulanu threatening to abstain.

However, Yisrael Beitenu's leader Avigdor Lieberman announced that despite being in opposition, his party would vote in favour.

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