Delek Drilling and Avner Oil and Gas have called on a government appointed panel on Israel's export policy for natural gas to increase the amount of gas permitted for export, the company said in a position paper submitted to the panel.
The paper by the two Delek Group subsidiaries was made public on Wednesday and is part of a lobbying campaign by gas exploration companies to get the panel to revise its recommendations in a final report due out at the end of June.
Delek and Avner said in their position paper that the committee grossly underestimated the potential reserves off Israel's Mediterranean coast and based its recommendations on these lower figures.
The panel headed by energy and water ministry director general Shaul Tsemach estimated potential gas resources at 1.4 trillion cubic meters, nearly double the country's current proven reserves.
The Israeli companies said that the figure should be 2.3 Tcm, on which the government based the change last year in the tax policy for the energy sector. Delek and Avner presented a similar position to that of Noble Energy. The companies are partners in the Leviathan and Tamar fields, the largest discovered so far in the eastern Mediterranean. In their position paper, the Israeli companies charged that the government committee was manipulating the same data in order to restrict exports on the one hand, and on the other raising them to determine its tax policy.
In a preliminary report issued on April 5, the panel recommended that gas exports be permitted after a 25-year reserve of gas supplies is guaranteed for local use. The committee said the 25-year reserve level should begin in 2018 and prior to that a minimum reserve of 400 Bcm should be guaranteed.
The preliminary report recommends that exports be based on the size of each reservoir. A reservoir with reserves exceeding 200 Bcm would be required to supply a minimum of 50% of the total to the local market; 100-200 Bcm minimum supply 40%; 50-100 Bcm 25% and reservoirs of less than 50 Bcm would not face any restrictions. Gas exports, however, would not be permitted until the requirements of the Israeli economy are met. The committee estimated that total domestic demand through 2040 would be 420 Bcm.
In addition to calling for larger gas export quotas, Delek expressed an objection to permitting exports solely from Israeli based facilities and requested that the option of Cyprus be left open.
Noble Energy and the Delek Group have been holding talks with the Cypriot government for setting up a joint plant that would be located at Vasilikos along the southern coast of Cyprus. The proposed liquefaction plant would handle gas from the block 12 field where a major discovery was announced in December. Noble Energy and the two Delek Group subsidiaries are partners in block 12.
