Israeli Court Opens Hearings on Contentious Offshore Gas Deal

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JERUSALEM (AFP) – Israel’s Supreme Court began hearings Wednesday on a contentious natural gas deal aimed at tapping major reserves in the Mediterranean that could lead to important shifts in the region’s energy supplies.

The deal between the Israeli government and a consortium including US firm Noble Energy, pushed forward by Prime Minister Benjamin Netanyahu, has been criticised by those who say it overly favours the companies involved.

Political manoeuvring by Netanyahu to override anti-trust authorities has also been denounced.

The court was full as judges began hearing five challenges to the complex accord that would lead to the development of the Leviathan field in the Mediterranean, described as one of the biggest recent natural gas discoveries.

Israel’s monopolies commission opposed an initial agreement between the government, Noble and its Israeli partner Delek, leading to months of further negotiations under strong political pressure.

Netanyahu signed a new deal on December 17, with the companies having agreed to sell some of their other assets as part of the accord.

To sidestep anti-trust objections, Netanyahu used an obscure clause allowing the deal to be pushed through by the economy minister — a portfolio he holds.

Previous economy minister Aryeh Deri resigned in November after refusing to overrule the anti-trust authorities and has since been named interior minister.

Israel has been trying to extract offshore gas since the discovery of the Tamar and Leviathan fields in 2009 and 2010. Production has begun in Tamar, but the far larger Leviathan has been hit by a series of delays.

The size of the Leviathan field is estimated at 18.9 trillion cubic feet (535 billion cubic metres, or bcm) of natural gas, along with 34.1 million barrels of condensate.

Noble and Delek also control the Tamar field, which holds 250 bcm of natural gas, and lies 80 kilometres (40 nautical miles) west of the Israeli port of Haifa.

The discoveries were major boosts to Israel’s efforts toward energy independence.

It also intends to export gas from Leviathan to other countries in the region, which could grant Israel strategic leverage. Greece and Cyprus have expressed interest in cooperating with Israel on a gas pipeline.

Supreme Court approval of the deal would allow the consortium to move forward on contracts for gas sales, which could unlock crucial financing needed to develop Leviathan.