Market Key Points
- Daily consumption of oil in Israel: 300,000 BBL
- Daily production of oil in Israel is currently less than 1,000 BBL (< 1%)
- Stabilized economy with steady US Dollars to Israeli Shekels currency exchange rate.
- Yearly consumption of natural gas in Israel: 9.66 BCM (2016) – 15% increase from 2015.
- Increasing local demand for oil and gas resulting from developing economy and fast population growth.
Domestic Market Immediate Need For An On-Shore Gas Supplier
- Currently Israel’s natural gas supply comes just from deep offshore.
- On-shore gas discoveries are cheaper to develop, produce and deliver therefore more competitive than offshore.
- On-shore has close proximity to the National Grid Pipelines and storage infrastructure.
- Strategic national importance of on-shore production to the Israeli government and clients as it offer supply continuity, diversification of gas providers and supply routes.
GOE seeks to fulfill the on-shore gas production goal.
- Gas sales at optimum international prices, assuming average of $4.5/MMCF.
- Competitive fiscal terms, low operating costs due to the currently depressed international oil and gas drilling market.
- Service company costs reduced due to industry oversupply.
- Discounted price and easy route for transportation of the existing equipment in the Middle East.
- Regional geopolitical opportunities : Jordan, PA, Turkey, Greece and Southern Europe.
*Israel Natural Gas Demand Forecast 2014-2040, www.modelim.co.il 2014
Increasing Oil and Gas demand
Continuous increase of local demand for NG and oil.
Domestic gas market significantly under-supplied due to a continual average rise of 3.1% p.a. in electricity consumption; emphasis on minimal use of heavy fuel oil or coal and on maintaining current extent of reliance on coal power stations.
Transition to Clean Energy
Transition to natural gas as the primary fuel for electricity generation targeting 60% in 2027 and 68% by 2040. In 2030, generation from natural gas during peak demand is predicted to be 80%.
Source: Ministry of National Infrastructures, Energy and Water Resources, 2015
*Source: Israel Natural Gas Lines
Crude Oil Pipelines System consists of 3 separate pipelines: A 41″, 254 km long line links the Red Sea Port of Eilat with the Mediterranean Port of Ashkelon. Two other lines feed the Oil Refineries in Haifa (13 km from Yahel-1) and Ashdod (30Km from Ofek-2ST).
The company operates two oil ports and two oil terminals with a total storage capacity of 3.6 million cubic meters for crude oil and oil products in Eilat and Ashkelon (15 km from Ofek-2ST).
Energy Transportation Infrastructure
Israel natural gas lines network transmission begins at the receiving terminals. The natural gas is transmitted under pressure through large diameter pipelines to “major intersections” where it enters a Pressure Reduction and Metering System (PRMS).
Then the gas is transmitted to customers and consumers using a distribution grid comprised of smaller diameter pipelines.
The natural gas transmission network in Israel currently includes four main trunklines serving the western, central, northern and southern regions of Israel.
Expanding Distribution Grid
According to the existing plans for network development, the transmission network will be able to transmit between 10 and 15 billion cubic meters (BCM) of natural gas (from the receiving terminals to the customers) per year, and approximately 1.8 million cubic meters per hour.
*Source: EAPC Ltd.