The signing today in Amman of the agreement to sell Leviathan gas to the Jordanian Electric Power Company (JEPCO) is a strong indication that the gamble the Leviathan partners took paid off - to give priority to natural gas sales to Israel’s neighboring countries instead of establishing expensive LNG liquefaction facilities to export Israeli gas to Far East customers.
The regional option is more attractive by every economic measure, but is fraught with significant geopolitical risk. This risk did not arise in the case of the Jordanians, despite the doomsday predictions made by some.
The Memorandum of Understanding (MOU) between the Leviathan partners and JEPCO was ready for signing a month ago. But then Operation Protective Edge began, and the signing was postponed. The Jordanians were determined to sign the agreement and waited patiently for the cease-fire agreement to be signed. The regional tensions - the threats of Qatar and Hamas and the threatening presence of Islamic State on their eastern border - did not deter them.
But the situation is not the same everywhere. Relations with Turkey suffered a major blow in the wake of Operation Protective Edge, and there is significant doubt as to whether the option of selling gas to companies in Turkey still exists for the Leviathan partners.
Published by Globes [online], Israel business news - www.globes-online.com - on September 3, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014