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October 24, 2013 9:35 pm

Israel Seeks to Keep U.S. Energy Investors ‘Satisfied’ as Natural Gas Biz Prepares for Boom

avatar by Joshua Levitt

An aerial view of the Israeli gas rig Tamar. Photo: Albatross Aerial photography/Nobel Energy/FLASH90.

Israel wants to keep U.S. energy companies that support the country’s nascent offshore natural gas wells “satisfied” because if there are “no investors, there won’t be any gas,” Eli Groner, Israel’s Economic Attache to the U.S., said at a conference in Washington, D.C., on Thursday.

“The Americans have an interest in their companies operating in the eastern Mediterranean basin and profiting from this activity, and we have an interest in encouraging this,” Groner said, according to a correspondent for Israel’s Globes who was at the conference.

“We should create an investor-friendly environment. We need a satisfied Noble Energy Inc. We want everyone who invests in drilling to be satisfied. If there are no investors, there won’t be any gas… Whatever the scenario will be, Israel must guarantee that investors find target markets in Israel and overseas so that their investments will make a profit,” he said.

The conference, “Power Shifts in the Eastern Mediterranean: The Emerging Strategic Relationship of Israel, Greece, and Cyprus,” organized by the Hudson Institute, focused on the new international political collaboration that’s come about due to the Israeli natural gas discovery.

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Globes reported that Groner said that Israel’s commercial and diplomatic relations with Cyprus and Greece are becoming closer as they work together on issues related to the natural gas, as well as collaborate to combat terror threats.

In August, Israel’s Minister for Energy and Water Resources Silvan Shalom  signed a three-way agreement with Greece and Cyprus relating to interconnecting electricity grids, protecting natural gas deposits and desalinizing sea water. One proposed route for the export of the natural gas is to Cyprus, then to Greece.

In September, a Turkish pipeline operator Turcas Petrol also “volunteered” to help Israel get its natural gas to Europe,  proposing to develop and construct a $2.5 billion, 470 km pipeline to connect the country to Israel’s Leviathan natural gas platform.

As for China, Groner said, “No one is forgetting China. Natural gas exports to China and Asia are one of the issues now under review in Jerusalem.” One possibility is the building of a railway line leading to Eilat which could boost exports to Asia via the Eilat Port.

The natural gas issue portends to radically alter the Israeli economy and its relations with its neighbors. The Knesset was recently criticized for delaying a decision on how much gas could be exported, but the MKs came to a compromise this past week.

“On Israel’s scale, revenues from gas are a third of the state budget. These are not decisions to take hastily,” Groner pointed out.

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