The fighting between Israel and militants from Gaza could hinder Israel and the wider eastern Mediterranean region’s ambitions of becoming a hub for exporting natural gas to Europe and other locations.
These aspirations received a boost when Chevron, the American energy company, acquired stakes in two large Israeli offshore gas fields through its acquisition of Noble Energy in 2020, a deal worth approximately $4 billion. Noble Energy had spearheaded the development of Israeli gas reserves.
Currently, natural gas fields off the Israeli coast account for around 70 percent of the country’s electricity generation, reducing the reliance on polluting coal. The gas has also helped decrease Israel’s heavy dependence on energy imports.
While these facilities have tight security measures in place, one of Chevron’s production platforms, Tamar, located about 15 miles off the city of Ashkelon in southern Israel, could potentially be vulnerable to attacks from Gaza.
During the 2021 conflict, the Israeli government instructed Chevron to temporarily shut down operations at Tamar.
In a statement over the weekend, Chevron emphasized its focus on the safe and reliable supply of natural gas for the Israeli domestic market and regional customers. The company referred questions about ongoing operations to the Israeli government.
Chevron is actively working on plans to expand production at the Leviathan and Tamar units and add pipelines to increase gas flows from Israel to Egypt. Egyptian facilities on the Mediterranean coast indirectly export Israeli gas in the form of liquefied natural gas.
Furthermore, Chevron is considering the installation of a floating liquefied natural gas processing facility in Israeli waters, a project that would require several billion dollars in investment. Chevron is also involved in operations in Egypt, a significant gas producer and consumer, and Cyprus.
The intense fighting that began on Saturday has the potential to slow down investments in gas fields in the region.
It could also impede Israel’s efforts to attract more international energy companies to engage in gas exploration. The expectation was that Chevron’s entry into the Israeli market would pave the way for other major international energy companies to invest there.
