Israel in talks with Cyprus on ‘possible cooperation’ in energy

The energy ministries of Israel and Cyprus are in talks “on issues of mutual interest and possible cooperation” after a report that they are close to signing a contract for Israel to provide Cypus with natural gas via pipeline, marking Israel’s first gas sale to Europe.

“As part of the strong relationship between Cyprus and Israel, the ministry is holding ongoing conversations with its Cypriot counterpart on issues of mutual interest and possible cooperation,” the spokesperson for Israel’s ministry of energy and infrastructure said in an Oct. 14 statement to S&P Global Commodity Insights.

The $1.5 billion contract to be signed is planned for 10 years with the gas to come via pipeline from Israel’s Karish and Tanin rigs to Cyprus, ynet.com reported Oct. 9.

Energean, which operates the Karish gas field offshore Israel, has submitted a request for an export license to Cyprus and previously proposed a pipeline solution, a spokeswoman said Oct. 13, referring all questions about a contract to Israel’s energy ministry.

Gas from Karish is produced via the 8 Bcm/y capacity Energean Power FPSO for supply to the domestic Israeli market. Gas from Karish reaches land to the north closer to the border with Lebanon.

Gas consumption is rising in Europe, with European gas prices trading around Eur40/MWh ($44/MWh).

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price on Oct. 11 at Eur39.55/MWh.

In the immediate aftermath of the Oct. 7, 2023, attacks on Israel by Hamas, the Israeli government ordered the closure of the Tamar platform as a precautionary measure. It resumed operations one month later.

Israel is now a major gas producer with exports to Egypt and Jordan. The country’s output hit a record high of 24.7 Bcm in 2023, according to Israeli energy ministry data published in May.

Karish, which started production in October 2022, produced 2.77 Bcm in the January-June period, an increase from 1.97 Bcm during the same period last year.

The country’s other two gas fields include Leviathan, which began operations in 2019, and Tamar with started in 2013.