Israeli PM signs contentious natural gas deal

Israeli Prime Minister Benjamin Netanyahu signed Thursday a contentious framework agreement to develop the country's offshore natural gas fields.

The approval came after years of political infighting and wide public protest, with weekly rallies in big cities throughout the country by tens of thousands of Israelis.

Signed in a ceremony in a gas-run industrial park in the southern Negev Desert, the deal will allow a consortium led by Texas-based Noble Energy and Israel-based Delek Group to develop Israel's largest gas field Leviathan, while forcing them to sell two smaller, undeveloped fields.

Delek will have to sell its holdings in the up and running Tamar gas field within six years, after most of its gas reserves would be sold.

"There is no way to open up the additional gas fields without this plan, it is the only chance," Netanyahu said in a broadcast speech.

"This gas was given to us as a gift from God," he said, noting that the newly-discovered gas could potentially make Israel "if not an energy superpower then definitely an important international force."

"This plan is important to our economy because it gives us a relatively cheap source of energy," he added.

Netanyahu decided to push ahead with the deal despite a decision Wednesday by the parliament's Economy Committee to advise against it.

The committee said the deal puts vital natural resources in the hands of one group, creating a monopoly that would block competition in the energy market and increase the prices of electricity.

Tamar, with an estimated 280 billion cubic meters (bcm) of gas, and Leviathan, with estimated reserves of 622 bcm, were found off Israel's Mediterranean coast in 2009 and 2010. The discoveries were hailed as a bonanza to the economy of the resource-poor country.

Gas production in Tamar kicked off in March 2013, but the development of Leviathan and the smaller Karish and Tanin have been stalled by years of political quarrels and a public protest.

Opponents of the deal charge the it gives too much power to Noble and Delek and "robs" the public of its natural resource by requiring the consortium to pay relatively low royalties.

At least three organizations - including the opposition Labor party, the college of the Academic Center for Law, and the Movement for Quality Government in Israel, a civil rights watchdog - already petitioned the Supreme Court against the deal. The discussion on the petitions is expected to start in February.

Earlier in December, the Israeli gas market was served another blow when the Egyptian government ordered a freeze on imports of Israeli natural gas after the International Chamber of Commerce ruled that Egypt was liable to pay 1.76 billion U.S. dollars in compensation to Israel's Electric Corporation after it canceled their bilateral gas deal in 2012.

Egypt said the freeze would last until at least after an appeal against the ruling. Endit