Israel hopes that its offshore Leviathan field will enable it to become a significant natural gas exporter for the first time
Jerusalem (AFP) - Israel's offshore Leviathan field started pumping gas on Tuesday in what the operating consortium hailed as "a historic turning point" for the Israeli economy.
A joint statement from partners Noble Energy, Delek Drilling, and Ratio said the start of production was expected to lead to an immediate reduction in domestic electricity prices and the start of exports.
"For the first time in its history, Israel to become a significant natural gas exporter," it said.
Israeli Prime Minister Benjamin Netanyahu -- currently campaigning for a third general election in a year -- welcomed the expected cheaper power.
"I have been fighting for years to extract gas in the face of the fierce opposition from political rivals," he wrote on Facebook.
The price of electricity "will decline further in the coming year thanks to natural gas, which makes Israel a regional power", Netanyahu said.
On December 17, Energy Minister Yuval Steinitz announced approval of sales to Egypt from Leviathan and the smaller Tamar gas field.
A spokesman for Israeli partner Delek said then that deliveries to Egypt were expected to begin on January 1.
Leviathan was discovered 130 kilometres (81 miles) west of the Mediterranean port city Haifa in 2010.
It is estimated to hold 535 billion cubic metres (18.9 trillion cubic feet) of natural gas, along with 34.1 million barrels of condensate.
Delek and US-based Noble struck a $15 billion, 10-year deal with Egypt's Dolphinus last year to supply 64 billion cubic metres (2.26 trillion cubic feet).
It will be the launch of Israeli gas exports to Egypt, which in 1979 became the first Arab country to sign a peace accord with the Jewish state.
Israel had previously bought gas from Egypt, but land sections of the pipeline were targeted multiple times by Sinai jihadists in 2011 and 2012.
The Tamar and Leviathan gas will reach Egypt through the mainly undersea East Mediterranean Gas Company pipeline connecting the coastal city of Ashkelon with Egypt's northern Sinai peninsula.
Tamar, which began production in 2013, has estimated reserves of up to 238 billion cubic metres (8.4 trillion cubic feet).
Israel's neighbour to the east, Jordan, has been purchasing gas from Tamar on a small scale for nearly three years.
Besides bringing energy independence, Israel hopes its gas reserves will enable it to strengthen strategic ties in the region and help forge new ones, with an eye on the European market.
Last week, the Greek government said it was to sign an agreement for a huge pipeline project with Cyprus and Israel designed to pipe gas from the eastern Mediterranean to Europe.
Greek Prime Minister Kyriakos Mitsotakis's office said the agreement for the EastMed pipeline would be inked in Athens on January 2 with Netanyahu and Cypriot President Nicos Anastasiades.
The 2,000-kilometre (1,200-mile) pipeline will be able to transfer between nine and 12 billion cubic metres a year from offshore gas reserves between Israel and Cyprus to Greece, and then on to Italy and southeastern Europe.
There are growing tensions with Turkey over its own activities in the area, particularly a contentious maritime deal with Libya expanding Ankara's claims over a large gas-rich area of the Mediterranean.
- Scramble for energy -
The discovery of hydrocarbon reserves in the eastern Mediterranean has sparked a scramble for the energy riches and a dispute between Cyprus and Turkey, which occupies the north of the Mediterranean island.
Natural gas is set to replace coal as the main fuel for power generation in Israel.
Critics note that while less polluting than coal, gas is still far from being a clean source of energy.
There have been fears among the Israeli public that the start of production from Leviathan, with gas flowing to a processing platform 10 kilometres offshore, could bring harmful emissions.
On Tuesday, more than 200 protesters gathered in Tel Aviv to oppose the project.
"It's a dark day for the residents of Hof Carmel and the citizens of Israel," said Ofer, a resident of the coastal town.
"This platform will pollute at least in the short term."
Israel's environmental protection ministry has sought to calm residents and has set up monitoring stations in communities along the northern coast to check for any spike in pollution.
Nevertheless, Israeli public radio reported that some residents had evacuated their homes until results of air testing are verified.