Egypt is weighing the impact of a halt in production at Israel’s Tamar gas field on its plans to resume LNG exports to Europe, according to officials.
The stoppage means Egypt’s imports of Israeli gas have declined by about 20% to around 650 million cubic feet per day, they said, asking not to be identified as they’re not authorized to speak publicly on the issue.
Israel ordered the shutdown of its key Tamar gas field run by Chevron Corp. in the eastern Mediterranean, citing safety concerns as fighting between its military forces and Hamas escalates. The Israeli government hasn’t informed Egypt of any halt to the much larger Leviathan gas field, one of the officials said.
Read More: Israel Orders Shutdown of Key Gas Field as War Rages
Egypt’s oil minister said last week the country will resume exports of liquefied natural gas this month, following a break over the summer. The country exports LNG processed from gas produced domestically and also from fields in Israel. The stoppage at Tamar could result in lower shipments to buyers in Europe, who are increasingly reliant on alternatives to Russian pipeline flows, especially during the winter heating season.
Benchmark European gas futures rose as much as 7.3% to the highest since mid-June, after gaining 15% on Monday.
Should Leviathan keep operating at usual rates and output is ramped up at the Karish field, Israeli gas should continue to flow to Egypt, according to Leo Kabouche, an analyst at Energy Aspects Ltd.
“Key unknown is the duration of the outage,” said Kabouche. “Israeli gas is critical to feedgas availability in Egypt given the slide in domestic production there.”
The Israeli government informed Egypt about the temporary suspension at Tamar on Saturday. Egypt has ambitions to become a regional gas hub, but flows from its two liquefaction plants slumped over the summer with no exports in June, August and September.
Gas discoveries in Israel over the last two decades have transformed the nation’s economy, and the shutdown of the Tamar field — about 50 miles (80 kilometers) west of Haifa — threatens its plans to become a major regional supplier. In August, Israel said it would export more gas to Egypt from the project amid strengthening ties with its neighbor.
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