The loss of imports of Israeli gas from the shut-in Tamar platform is expected to further impact Egypt's ability to export LNG, International Energy Agency gas analyst Gergely Molnar said Oct. 10.
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Tamar field operator Chevron was instructed by the Israeli energy ministry to shut in gas production from the offshore platform after Hamas attacks on Israel on Oct. 7.
Egypt imports Israeli gas from both the Tamar and Leviathan gas fields, located in the Mediterranean Sea off the coast of Israel, to help meet its domestic demand and for LNG exports from its two liquefaction plants.
Molnar, speaking in a webinar to mark the launch of the IEA's latest medium-term gas market outlook, said gas markets had reacted in "quite a sensitive manner" to the developments, although other factors, including news of renewed strike action in the Australian LNG sector, also pushed prices up.
Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price Oct. 9 at Eur43.40/MWh, up 14% on the day.
Molnar said Tamar was a "very important" field when it came to Israel and the region's gas supply-demand balance.
"Closing the field temporarily can have impacts both on gas deliveries to the domestic market in Israel but also on the country's export capability," he said.
"When we are looking at the upstream sector in Egypt, we have already seen that it is struggling to keep up pace with rapidly rising domestic consumption as well as LNG exports," he said.
"If we take out Israeli pipe gas imports from that equation, it will harm the ability of Egypt to export LNG over the coming months."
Egypt exported only one LNG cargo in August and none in September due to high summer domestic gas demand, according to data from S&P Global Commodity Insights.
Egyptian LNG exports so far this year have reached only 3.38 million mt, compared with 7.1 million mt for the whole of 2022, the data showed.
Egypt has two LNG export facilities -- the 7.2 million mt/year Shell-operated Idku facility and the smaller Eni-operated 5 million mt/year Damietta plant.
The two plants are considered key to European efforts to source additional LNG, including gas sourced from Israel.
In June 2022, the European Commission, Israel and Egypt signed a trilateral memorandum of understanding on the supply of Israeli gas via Egypt's LNG export infrastructure to the EU.
State of emergency
It remains to be seen how long the Tamar platform will be shut in, with the Israeli energy ministry ready to declare a state of emergency in the gas sector.
In a statement Oct. 9, the ministry said the Israeli government had authorized minister Yisrael Katz to declare the state of emergency in the next two weeks, if needed.
This would allow the minister to order the allocation of gas to consumers if a gas shortage had a prolonged impact on the "orderly" functioning of the economy or the regular supply of electricity.
Israel, which also exports gas to Egypt and Jordan, has become a major gas-producing country in recent years owing to the Tamar, Leviathan and Karish fields.
Israeli gas production totaled 12.3 Bcm in the first half of 2023, the country's energy ministry said in late August, and was on track for record production in 2023.
The ministry said Leviathan produced 5.44 Bcm in the first half of the year, while the Tamar output was at 4.91 Bcm and Karish at 1.97 Bcm over the same period.
Karish is the newest of Israel's gas fields, having started up in October last year, while Leviathan began production in 2019 and Tamar in 2013.
Israeli gas production totaled 21.9 Bcm last year, a new record high for the country, according to ministry data, with Leviathan producing 11.4 Bcm, Tamar 10.2 Bcm, and Karish 0.3 Bcm of gas.
Additionally, there was an increase in domestic Israeli consumption to 12.7 Bcm, with exports to Egypt and Jordan also rising by 29% on the year to 9.2 Bcm in 2022.
In May 2021, Chevron temporarily had shut in Tamar for several days on the order of the energy ministry after rockets were fired at Israeli cities from the Gaza Strip.
While Tamar was closed, Chevron continued production from Leviathan. The Tamar platform is located closer to Gaza than Leviathan, whose platform is further north offshore Israel, close to the port of Haifa.
The Tamar platform was also shut in before because of conflict in the region.
In May 2019, Israel decided to halt gas supplies from the platform after an increase in cross-border fighting between Palestinian militants and Israeli forces that lasted for three days.
Tamar is operated by Chevron with a 25% stake. Its other partners are Isramco (28.75%), Tamar Petroleum (16.75%), Mubadala Energy (11%), Tamar Investment 2 (11%), Dor Gas (4%) and Everest (3.5%).