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Tuesday, June 24, 2008

Israel Wants Russian Gas

Israel wants gasJune 24, 2008 - Kommersant - Israeli Minister of National Infrastructure Binyamin Ben-Eliezer has proposed to Gazprom that it supply natural gas to the Israeli market. By 2010, the Israeli government estimates, consumption of natural gas will rise to 8 billion cu. m. from 800 million cu. m. last year. The contract could help Gazprom fill the Blue Stream pipeline, but infrastructure would have to be extended from Turkey to Israel. Gazprom topper Alexey Miller discussed those possibilities with Ben-Eliezer. Deputy head of Gazprom information Sergey Kupriyanov later confirmed that gas supplies n the basis of a long-term contract had been discussed, but noted that negotiations had been going on for three years, and it is still impossible to specify a timeline or volume of gas. Oil makes up about 67 percent of the energy balance in Israel. Coal accounts for 30 percent, and natural gas for less than 1 percent. Israel has proven reserves of gas of 47 billion cu. m. and produces about 800 million cu. m. per year. The country now buys gas from local deposits from the Israeli-American consortium Yam Thetis and from the Israeli-Egyptian Eastern Mediterranean Gas group. In 2006, Vladimir Putin, then president of Russia, and Olmert Ehud, then acting prime minister of Israel, discussed Russian gas deliveries to Israel through the Blue Stream pipeline. Israel’s only condition was a fixed price for the gas. Since then, however, the countries have been unable to agree on a contractor to build that section of the pipeline. Russia now sells Turkey 11 billion cu. m. of gas per year through the Blue Stream pipeline. It plans to raise sales to 16 billion cu. m. in 2011. Observers note that an extension of the pipeline to Israel would be exceedingly complex and costly.

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