Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to Business FM on the significance for the European gas market of an agreement for the Israeli gas supply to Egyptian liquefaction plants.
The European Union, Israel and Egypt signed a memorandum of understanding in the field of gas exports, which should help the EU to abandon fuel from Russia. Deliveries will go from Israel through Egypt.
But the current volume of gas production in Israel is not yet so significant for the EU, Alexey Belogoryev says:
- Gas production in Israel in the 20s will amount to 20-25 billion cubic meters per year, and half of them will go to the domestic market. Domestic consumption is growing more slowly than production, there are different estimates of total exports, they now fluctuate between 10 billion cubic meters and 20 billion. At the same time, supplies to Egypt for liquefaction at Egyptian plants are a temporary measure, a temporary solution for the monetization of Israeli gas. The construction of a pipeline to Turkey is considered to be more long-term, but it is difficult to say what the price will be. And, most likely, when deliveries to Europe, this will be tied to spot prices, this is an additional factor why Egyptian-Israeli gas can go to Europe, because there are still many contracts in Asia that are tied to oil, respectively, supplies for them are much cheaper for consumers. Europe is interesting for suppliers, including due to its common pricing model - it has a lot of spot sales.
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