Wed Aug 29, 2012 8:30pm IST–JERUSALEM, Aug 29 (Reuters) – Israel will allow a significant amount of its newly found natural gas to be exported, but first it must keep enough reserves to satisfy its own needs for 25 years, a government panel decided on Wednesday.

Ending months of uncertainty that cast a shadow on the country’s fast-developing energy sector, the committee set a cap of 500 billion cubic meters (bcm) of gas that can be exported from the cluster of fields discovered off Israel’s coast.

Oil and gas companies had been looking for guarantees they could sell reserves abroad because Israel is a relatively small market. For itself, Israel will set aside 450 bcm.

“The name of the game is certainty,” said Shaul Tzemach, director-general of the Energy Ministry and head of the committee tasked with shaping the nascent exploration industry. “So whoever does explore, and does make a discovery, will know they have a market to sell to.”

Nineteen new wells are expected to be drilled in the next two years at a cost of about $2 billion in an area of the eastern Mediterranean larger than the country itself.

The companies also hope to find oil in the layers beneath the gas deposits.

Israel is already setting up a natural gas wealth fund and government officials have said total revenues from gas sales could reach $130 billion by 2040.

The first big field, Tamar, with estimated reserves of 274 bcm, was discovered by a U.S.-Israeli consortium in 2009. It is set to go online mid-2013 and the group has signed multi-billion dollar contracts to supply Israeli energy companies.

The Leviathan field, discovered a year later, holds an estimated 480 bcm, making it the world’s largest offshore find of the past decade. It is expected to begin production in 2017, and Texas-based Noble Energy has said it is studying export options, including as liquefied natural gas…Read More>>

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