Israel reignites debate on how much natural gas to sell abroad

(Reuters) - Israel should urgently examine how much natural gas the country should export to make sure it keeps enough for itself, a senior official at Israel's Finance Ministry said in a letter seen by Reuters.

The country is expected to roughly double its gas output over the coming years and is weeks away from a highly-anticipated licensing round for new oil and gas exploration blocks offshore Israel.

Yogev Gardos, Israel's budget director, said there was an "immediate need for the examination" of export policy.

In a letter to the director-general of the Energy Ministry, Gardos said Israel's energy landscape has changed since the previous review in 2018 in part because of slower than expected deployment of renewable energy in the country.

As a result, exporting too much "could endanger Israel's energy security" and lead to higher electricity prices, he wrote.

Energy Minister Israel Katz responded to the letter in a Twitter post.

"Decisions on the gas sector take into account broad policy considerations, such as Israel's standing, and the one who will make the decisions is me - the minister elected by the people. Not the professional echelon," he wrote.

After discovering huge quantities of gas off its Mediterranean coast over a decade ago, and after months of fiery high-level debate, Israel set limits in 2013 on how much could be sold abroad, earmarking around 60% of reserves for domestic use.

Since then it has signed substantial export deals with Egypt and Jordan, as well as a framework agreement to supply Europe. Such access to foreign buyers has encouraged international energy companies including Chevron to invest in the nascent Israeli market.

With energy groups planning to expand production facilities and Israel's pipeline network, annual output is set to reach about 40 billion cubic metres (bcm) from about 20 bcm, industry officials say.

Bidding in Israel's fourth offshore licensing round, which includes 20 exploration blocks, will close on July 16, and the winners are set to be announced late this year, according to the latest government timetable.

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