September 29th, 2015
Israel is considering building a second offshore LNG terminal in order to reduce risks to local power generation and increase its energy security. According to the business daily Calcalist, the idea was floated last week at a meeting headed by Energy Minister Yuval Steinitz. The Energy Ministry is interested in doubling the number of LNG cargo Israel can receive.
Currently there is one offshore LNG terminal that is supplied by a regasification ship that loads LNG from a vessel anchored further from the shore. That LNG is used only during peak electricity demand, as happened a few weeks ago at the height of summer, or during emergencies, a situation that has yet to materialize.
However the expected delay of at least 3 years in the development of Leviathan has compelled Israeli officials to think of an alternative to increasing Israel's energy security. Currently gas is supplied only from the Tamar field through one pipeline and one entry point. According to Mr. Steinitz, that is grave danger to gas supply and power generation in the country.
The cost of building a new offshore LNG terminal is estimated at $500 million, while keeping an FSRU ship on standby and an LNG ship for supply is also an expensive operation.
In 2013, Israel Electric Corporation posted a loss of $24 million when it had to resell LNG cargo it did not need. A top IEC official the company lost $700 million up until the end of 2014 on consumption of only 1-2 BCM in LNG, according to the business daily Globes. Those were probably among the most expensive LNG shipments ever.
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