By Sara Toth Stub
Special to DOW JONES NEWSWIRES
JERUSALEM--Israel is likely facing rolling electricity blackouts
this summer as a heatwave and natural-gas shortage could result in
energy demand outstripping supply, the state-run Israel Electric
Corp. Ltd. said Wednesday.
The electricity shortage results from both a shortage in natural
gas provisions and lack of sufficient infrastructure, including
power stations, the electric company said, although any blackouts
would only likely last for one hour each day, and occur in one
geographic region at a time, the state company said.
Moreover, economists contacted by Dow Jones Newswires Wednesday
said blackouts would not likely impact the economy, with the
problem only being short-term. Since Israel's Tamar natural gas
field is scheduled to start production next year, the country will
have enough gas to be self-sufficient for up to 30 years, according
to Ayelet Nir, chief economist at Psagot Investment House in Tel
Aviv.
"It's important that we have these new discoveries [Tamar, which
contains 9 trillion cubic feet of natural gas, and the neighboring
Leviathan field, which contains 17 trillion cubic feet of natural
gas] coming online," said Roni Biron, senior analyst at UBS Israel.
"It should allow Israel to be self-sufficient for gas consumption
for a number of decades."
The Tamar reserve, off the coast of northern Israel about 1,700
meters deep in the Mediterranean, was discovered to contain large,
commercial amounts of natural gas in 2009. The Tamar field was
second only to Israel's other large gas field, Leviathan, in terms
of natural gas fields discovered in the last decade, said Amit Mor,
CEO of Eco Energy Ltd., an Israeli strategic and financial
consulting firm for the energy sector.
"The connection of the Tamar field to the electricity grid is a
major step in Israel's energy independence," Mr. Mor said. By 2016,
Israel is expected to rely on natural gas for 70% of its
electricity generation, up from its current level of 40%, Mor
said.
But Israel will face the challenge of keeping the Tamar field,
which will be its only source of gas until production can start at
Leviathan some years later, secure from geopolitical risks, as it
is located just 10 miles offshore from Gaza, Mor said. Noble Energy
Ltd. (NBL) owns 36% of the Tamar field. Delek Group Ltd. (DLKGF,
DLEKG.TV) subsidiaries Avner Oil Exploration (AVNRL.TV) and Delek
Drilling (DEDRL.TV) each own 15.6%, with several other companies
holding the remaining stake.
Meanwhile, Israel Electric Corp has called on consumers to
conserve power to help avert blackouts.
Since early 2011, Israel's natural gas supply from Egypt has
been interrupted dozens of times due to a series of attacks on the
pipeline in the Sinai peninsula, a problem exacerbated by the fall
of former president Hosni Mubarak's regime.
This has forced the electric company to increase prices so it
can buy more expensive sources of fuel, including diesel. Indeed,
this week the electric company raised $2.9 billion in a bond issue
to ensure positive cash flows amid the shortage of gas.
The electric company also lacks enough power stations that can
use alternative fuels, such as diesel, the company said, meaning
that the gas-only stations can't operate fully during a gas
shortage. The electric company is currently converting at least one
major power station that runs on natural gas to also run on diesel,
in addition to building more power stations.
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