Updated June 24, 2008

   Israeli National Infrastructure Minister Benjamin Ben-Eliezer offered Gazprom to deliver gas to Israel market. According to Israel government calculations, by 2010 gas consumption in the country can grow up to 8 billion cu. m. against 0,8 billion cu. m. in 2007. This contract would help Gazprom to fill the Blue Stream gas pipeline, but one should construct gas-transport infrastructure from Turkey to Israel to organize deliveries.

   On June, 23 in Moscow within talks with Benjamin Ben-Eliezer Gazprom board chairman Aleksey Miller discussed prospects of the Russia-Israel co-operation in energy area. As the monopoly press-service reported, "was considered the organization possibility of Russian gas deliveries to Israel", thus the Israeli minister showed the initiative and "took great interest in Russian gas deliveries to Israel on the long-term contracts basis". As explained deputy head of Gazprom information policy department Sergey Kupriyanov, gas deliveries to Israel could be organized through Blue Stream. However, it is impossible to talk about volumes and timeline of contract execution, as talks have been going on for more than three years.

   Oil stake makes around 67% in the energy balance of Israel, coal and natural gas – 30% and less than 1% respectively. Proven Israeli natural gas reserves are estimated at 47 billion cu. m. Gas extraction totals around 800 million cu. m. a year. According to the Israeli government forecasts, by 2010 natural gas needs will make around 8 billion cu. m. Currently Israel purchases gas at the Israeli-American consortium Yam Thetis from the local Israeli fields, and at Israeli-Egyptian group Eastern Mediterranean Gas.

   Gazprom started to hold talks about gas deliveries to Israel in 2006. Then president (now prime minister) of Russia Vladimir Putin said that the Blue Stream gas pipeline linking Russia and Turkey could be lined to Israel. And Olmert Ehud, then acting prime minister of Israel, specified that agreement signing about gas deliveries to Israel would take place in 2007. Israel authorities’ only condition for contract conclusion was fixed gas price. But parties have been unable to agree on a contractor to construct gas pipeline from Turkey to Israel.

   Now Russia sells Turkey through Blue Stream 11 billion cu. m. of gas and in 2011 plans to increase sales volume to 16 billion cu. m. New infrastructure construction from Turkey to Israel is very expensive now, as Gazprom specialists consider. "If Turkey organizes swap deliveries of Azerbaijani gas to Israel for Russian gas deliveries to Greece, such scheme can justify itself", as explained a source in Gazprom. East European Gas Analysis director Mikhail Korchemkin consents with him. "The only pipeline option is construction of expensive underwater gas pipeline to Israel, as the country relationships with Syria prevent onshore pipeline construction", an expert marked. Maxim Shein from BrokerCreditService named the possible contract of Gazprom with Israel rather political, than commercial one.