Precautions in Israel’s energy sector during war – Arab media

Middle East Economic Survey, a journal specializing in the Middle East oil sector, published an extensive study on the impact of the Gaza war on Israel’s energy sector, and the potential energy potential if the Gaza war continues for a long time, and then the war escalates. The following is a brief review of the study published last week.
The study showed that if the war between Israel and Hezbollah escalates and expands, the measures expected to be taken by Israel are “stopping project work at the three gas fields of Leviathan, Tamar and Kalish”. She added that alternative fuels that can be used are sustainable energy alternatives, coal and crude oil, and they are already available and prepared.
It goes without saying that the Israeli energy sector has faced enormous difficulties since the October 7 Hamas attack and Israel’s war on the energy sector. Mace estimated that by the end of March last year, the additional costs of providing oil and gas supplies, in addition to the losses caused by lost gas sales, were about $1 billion.
Metz’s message also indicated that if the war expanded or escalated, and if Iran, especially the Revolutionary Guards, stepped in to support Hezbollah, Israel would shut down its three gas-producing fields – Leviathan, which produces 1.2 billion cubic feet per day, Tamar, which produces 1.1 billion cubic feet per day, and Kalish, which produces 600 million cubic feet per day.
Therefore, if the war escalates and expands, Israel’s alternative is to switch from natural gas power generation to coal, diesel and sustainable energy. Although by 2023, natural gas will account for about 70.8% of the fuel for Israel’s power plants, and Energy Minister Eli Cohen announced that “over the years, and especially after October 7, we have studied multiple scenarios and had long discussions on this matter.” The scenario reached is an unexpected complete power outage for 48 hours.
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If Israel’s natural gas supply is stopped, Jordan and Egypt, which rely to varying degrees on imports of Israeli natural gas, will face severe challenges.
“While natural gas provides 13 billion cubic feet of electricity for Israel by 2023, or about 71 percent of its electricity, the ability to switch to another fuel will mean Israel faces less risk if it stops producing gas from Egypt,” said Mace. And Jordan.
In recent years, Jordan has made important progress in building sustainable energy, but 80% of Jordan’s electricity generation still relies on fossil fuels (especially natural gas). The local “Risha” gas field supplies about 8% of the natural gas supply used for power generation, while by 2023, about 98% of the natural gas is imported from Israel, in addition to two batches of liquefied natural gas imported through the port of Aqaba.
On the other hand, in 2023, the Levitan gas field’s natural gas supply to the Jordanian National Electricity Company reached about 259 million cubic feet per day, accounting for about 89% of Jordan’s natural gas supply to the power sector (according to the 2023 Levitan gas field’s natural gas supply to the Jordanian power sector …91 million cubic feet per day, accounting for 72% of Jordan’s electricity supply).
If Israeli gas supplies are halted, Jordan could choose to increase LNG imports by loading them onto tankers specifically built to store and transport LNG, anchored in the Gulf of Suez, and sailing from there to Israel at the port of Aqaba.
Mays said Jordan could import enough liquefied natural gas through the port of Aqaba to meet total domestic demand. But the challenge is to pay the high cost of this alternative. The price of imported liquefied gas is twice the price of natural gas from the Leviathan field, because the price of natural gas in Israel is $6 per British thermal unit, and the price of liquefied gas is twice that price. Therefore, although there is a way to replace imported Israeli natural gas, the Jordanian National Electricity Company is heavily in debt, which makes importing liquefied natural gas an unbearable financial burden. In this regard, the latest IMF report on the Jordanian economy shows that the debt of the “Electricity Company” is about $6.1 billion, which is about 11.5% of Jordan’s total domestic revenue at the end of 2024.
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Egypt’s reliance on imported Israeli gas has increased recently due to a decline in production at the Zohr field. This reduction has caused Egypt’s imports of Israeli gas to increase to a record level in the first quarter of 2024, averaging about 1.03 billion cubic feet per day, while imports in 2023 will be about 834 million cubic feet.
It is worth noting that the temporary decline in exports from the Tamar and Leviathan fields has led to a limited power outage in Egypt recently. In addition, liquefied natural gas has been imported to avoid a huge power crisis in the summer.
Egypt is expected to soon import more liquefied natural gas, in addition to importing fuel oil to replace natural gas for power generation. However, as in the case of Jordan, the import of liquefied natural gas and fuel oil imposes an additional burden on the Egyptian Ministry of Finance. As for Egypt, the average consumption of fuel oil is about 77,000 barrels per day, but now, due to the need to use fuel oil for power generation, consumption has increased since the beginning of summer 2024, bringing consumption to about 193 thousand barrels per day. As for the import of natural gas from Israel, the price is between $6-7 per million British thermal units, which is almost half the price of the same amount of imported liquefied natural gas.
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Israel, for its part, is working to restore the situation amid disruptions to gas production. The available alternative is to operate two coal-fired power plants with a capacity of 4.84 GW. Israel continues to burn coal at both plants to cope with the emergency, although they are also able to burn natural gas. The two plants are Rothenberg in Ashkelon (2.25 GW) and Orot Rabin in Hadera (2.59 GW).
However, it is clear from recent statements by some officials that Israel’s reliance on coal-fired power generation in an emergency does not depend solely on the two power plants mentioned above. There are a large number of power plants burning coal or diesel, not to mention hundreds of generators scattered across the region.
Expert estimates vary on whether Israel would be able to continue to supply electricity without long-term interruptions if the war expanded to include Iranian and Iraqi militias in addition to Hezbollah.
Israel Electric Corporation reports that Israeli power plants have enough coal stocks to run at full capacity for five weeks by the end of 2023. Coal reserves may have increased since the October 7 attack, although Colombia has stopped exporting coal to Israel in recent months due to a decision by Colombia’s leftist government.
Oil industry sources said Israel has increased its stockpiles of diesel, which can also be burned in power plants. Power plants that can use diesel instead of natural gas have the potential to generate 12 gigawatts of electricity.
Israel is also able to import crude oil and refine it in two refineries: the Bazan Refinery in Haifa, with a refining capacity of 197,000 barrels per day, and the Ashdod Refinery, with a refining capacity of 100,000 barrels per day, located 20 kilometers north of Israel in the Gaza Strip.
The report notes that attempts to explore with all parties concerned the question of to what extent the two Arab countries could rely on imported Israeli gas in the event of an escalation of the war have been fruitless and have not resulted in responses or comments, despite the importance of the issue.

London Middle East
Walid Kaduri