Natural gas royalties have risen dramatically in Israel, with the country raking in over NIS 1 billion ($263 million) through June. When compared to the same period a year ago, this number represents a tremendous 23% growth. The Ministry of Energy and Infrastructure made the announcement, citing an increase in royalties due to an increase in natural gas production for exports and the depreciation of the shekel relative to the dollar.
Increased natural gas output from the offshore Karish field is the direct cause of the dramatic increase in royalties. Since beginning production in October 2022, this field has brought in a remarkable NIS 145 million ($38 million).
In addition, according to the report, over half of the natural gas royalties revenue, approximately NIS 590 million ($155 million), was derived from exports, primarily to Egypt and Jordan. Based on current trends, Israel anticipates a total collection of NIS 2 billion ($526 million) in royalties from natural gas and other natural resources throughout 2023.
Approximately NIS 482 million ($127 million) was collected from the production of roughly 5.44 billion cubic meters of natural gas from the nation’s largest reservoir Leviathan. Most of these royalties resulted from export sales, while a smaller portion, about 13.88%, came from domestic sales.
With 4.91 billion cubic metres of natural gas extracted, royalties from the Tamar gas field increased by a more modest 3.4% to a total of NIS 379 million ($100 million).
Recent developments in Israel’s energy landscape have led to discussions regarding natural gas exports. Last week, Energy and Infrastructure Minister Yisrael Katz granted approval for the expansion of natural gas exports to Egypt from the Tamar reservoir. The permit allows an additional 3.5 billion cubic meters of natural gas to be exported annually for the next 11 years from the Tamar field. This decision aims to enhance economic benefits, strengthen regional ties, and alleviate the cost of living for Israeli citizens.
The expansion plan involves the installation of a third transmission line connecting the Tamar wells to the production rig, along with upgrades to existing production equipment. A notable fraction of the augmented production capacity will be allocated for domestic use, covering around 15-25% of Israel’s existing natural gas consumption.
The Ministry of Energy in Israel predicts that this surge in exports will not compromise the country’s energy independence until at least 2048.
Israel’s successful natural gas operations have positioned the nation toward energy independence and resilience in a region marked by energy challenges. With total natural gas royalties exceeding NIS 11.7 billion ($3 billion), Israel continues to leverage its energy potential for economic growth and stability.