Israel PM signs major gas deal, but court battle awaits

Benjamin_Netanyahu_2012Israeli Prime Minister Benjamin Netanyahu signed a major natural gas deal Thursday aimed at tapping large deposits in the Mediterranean, but a court challenge was expected over the contentious agreement.

Netanyahu has pushed hard for the framework deal setting out parameters for developing natural gas resources offshore with a consortium that includes US firm Noble Energy.

He has faced strong opposition from political rivals and other critics who say the agreement amounts to a giveaway to the energy companies, with thousands having staged street protests against it.

Opponents are now expected to challenge it at the supreme court.

“The deal is important for the economy, security and foreign relations,” Netanyahu said before the signing.

Israel has faced increased pressure to move quickly after neighbouring Egypt’s recent discovery of what was described as the “largest ever” gas field in the Mediterranean.

The Jewish state will seek to export a portion of the gas to other countries in the region.

Netanyahu’s cabinet approved the agreement in August, but a parliamentary committee this week voted against allowing it to bypass usual antitrust oversight, though the vote was non-binding.

Israel’s monopolies commission has warned the agreement could give Noble and its Israeli partner Delek an effective monopoly.

To sidestep its objections, Netanyahu wants to use an obscure clause allowing the deal to be pushed through by order of the economy minister — a portfolio held by him, along with foreign affairs and other posts.

He has sought to do so in part by citing security concerns, saying Israel must increase its sources of energy to prevent supplies being cut by attacks.

Economy Minister Aryeh Deri resigned in November after refusing to overrule the country’s anti-trust authorities.

Israel has been trying to extract offshore gas since the discovery of the Tamar and Leviathan fields in 2009 and 2010.

While extraction has begun in Tamar, 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 northern Israeli port city of Haifa.

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