Israeli Gas Exports Surge to 13.2 BCM in 2024
Recent findings from the Gas Authority of Israel indicate a significant increase in gas exports, which rose to 13.2 billion cubic meters (BCM) in 2024 compared to 11.6 BCM in 2023. This increase continues a dramatic upward trend observed in recent years, particularly since the Leviathan gas field commenced production in December 2019, and even more so following the start of production at the Karish field in October 2022. From 2021 to 2024, gas exports from Israel have surged by 86%.
Export Trends and Market Share
This year, exports make up the highest percentage of gas sales recorded to date, accounting for 49% of the total gas exported from Israel, while 51% is allocated for domestic consumption. The primary markets for Israeli gas exports include Egypt and Jordan. Egypt imports around 10 BCM of gas annually through the EMG pipeline and gas infrastructure in Jordan, which consumes about 3.1 BCM of Israeli gas.
Forecasts from the Gas Authority suggest that demand for gas in Jordan, and even more so in Egypt, is expected to continue growing in the coming years, indicating a sustained reliance on Israeli gas supplies. Notably, between 2021 and 2024, exports to Egypt have more than doubled.
Economic Implications and Potential Concerns
The high level of gas exports has significant financial implications, yielding substantial profits for gas companies and contributing to government revenue through royalties and excess profit taxes, which are allocated to the Israeli Citizens’ Fund, known as the “Wealth Fund.” However, there are concerns that excessive exports might deplete Israel’s gas reserves, creating a potential supply shortfall in the coming years.
This issue has been extensively discussed in the “Dayan Committee” on natural gas policy, which highlighted contentious disagreements between the Ministry of Energy, advocating for continued export policies, and the Ministry of Finance, which favors increased obligations to retain gas supplies for local use.
Domestic Usage and Infrastructure Expansion
Domestically, approximately 80% of gas in Israel is utilized for electricity generation, with the remainder supporting industrial applications. The Israeli Natural Gas Lines Company (NTA) has been actively expanding its gas distribution network, which now spans a cumulative length of 729 kilometers, up from 662 kilometers last year and 414 kilometers in 2020. While NTA has outsourced gas management to local companies, it reclaimed control of certain pipelines in the Jerusalem area due to insufficient client connections by a previous operator.
Gas prstarts in Israel remain notably stable, averaging around $4.5 per heat unit since the beginning of 2022. This stability contrasts sharply with the volatile prstarts seen in Europe, which are forecasted to be approximately $14.2 per heat unit by the end of 2024. However, Israeli gas prstarts are higher than those in the U.S., which, due to extensive local production, stabilize around $3 per heat unit. The relatively low and stable gas prstarts in Israel contribute to maintaining lower electricity costs compared to Europe, despite various challenges in electricity production and distribution.
In conclusion, while the growth in gas exports presents lucrative economic opportunities for Israel, it simultaneously raises crucial questions surrounding future gas reserves and the balance between domestic needs and export ambitions