On Wednesday, Israel signed a memorandum of understanding with Jordan that will make the Jewish state Jordan’s chief natural gas supplier.
Under the memorandum, the Hashemite Kingdom will purchase $15 billion worth of natural gas from Israel’s Leviathan energy field over a 15 year period. This comes in addition to an earlier agreement signed in February, in which Jordan purchased $500 Million worth of gas from the already operational Tamar Field.
The move from Jordan comes as their gas supply line from Egypt has been sabotaged numerous times by terrorists in the Sinai peninsula. This new deal, which is the largest collaboration between Israel and Jordan to date, will turn Israel into Jordan’s chief energy supplier according to Globes business news website.
Now that the memorandum of understanding has been struck, a final agreement is waiting to be approved by Energy and Water Minister Silvan Shalom, who is expected to confirm it.
Amos Hochstein, the State Department’s Special Envoy and Coordinator for International Energy Affairs was among those present in Jordan during the negotiations and signing of the deal. Also in attendance were representatives of Delek Group (based in Israel) and Noble Energy (based on Houston), both of whom are partners in ownership and operation of the Leviathan field.
Minister Shalom welcomed the agreement, and termed it “a historic act that will strengthen the economic and diplomatic ties between Israel and Jordan.”
“At this time, Israel is becoming an energy superpower, which will supply the energy needs of its neighbors and strengthen its standing as a central source of energy supply in the region, and I welcome it,” he said in a statement.
In a decision last year, it was decided that Israel would export 40 percent of the country’s offshore gas finds, and has since signed a number of agreements including a 20-year, $1.2 billion deal with a Palestinian firm to supply gas to the Palestinian Authority, as well as a letter of intent to supply an Egyptian facility with gas.
In March 2013, Israel began pumping natural gas from the Tamar deposit which holds an estimated 8.5 trillion cubic feet of natural gas.The Leviathan field — which boasts an estimated 16-18 trillion cubic feet of gas — is expected to become operational in 2016.
The newly found fields (Tamar 2009, Leviathan 2010) are expected to transform Israel from an energy importer to a major regional exporter.
According to a report in The Times of Israel the decision to export gas grew out of conclusions arrived at by the Tzemach Committee which was formed to determine how much gas should be kept for internal use and how much should be exported. The committee, which was headed by former Water and Energy Ministry Director General Shaul Tzemach and was formed in the fall of 2011, called on Israel to keep the first 450 billion cubic meters for domestic use and allow the export of up to half of any additional amount extracted from the discovered fields.
This new deal comes only a week after Israeli Prime Minister Benjamin Netanyahu promised a “new diplomatic horizon,” and improved regional ties following Operation Protective Edge.