Israel top court strikes down gas development deal

Israel's top court on Sunday struck down Prime Minister Benjamin Netanyahu's landmark natural gas policy aimed at paving the way for the exploitation of Mediterranean gas reserves, while suspending formally striking the law for one year so that he and parliament can fix an objectionable clause.

A panel of Supreme Court justices said in their ruling that a clause in the plan that prevented it from being changed for a decade was unacceptable.

"We have decided to cancel the gas deal because of the stability clause" that would have barred future governments from altering the deal, the justices said. They suspended the ruling for a year to enable parliament to amend the agreement.

The deal, signed in December with US company Noble Energy and its Israeli partner Delek, would have regulated the development of the Leviathan field in the eastern Mediterranean, one of the biggest recent natural gas discoveries, in addition to other issues.

Critics of the deal between the Israeli government and the consortium say it is overly favourable to the companies involved.

Israel's development of its Mediterranean reserves holds serious implications for the country's efforts towards energy independence.

It could also have an impact on regional diplomacy, since Israel is expected to export some of its gas.  

Netanyahu, who pushed forward the deal and even appeared at the court to defend it, used an obscure clause to override the anti-trust authorities.

That allowed it to move forward with the approval of the economy minister - a portfolio he holds after the previous one resigned over the gas deal.

'Miserable’ ruling

The court ruling was enthusiastically praised by members of the opposition parties, some of which were part of the petition against the deal.

Opposition leader and Labour head Isaac Herzog called the court's decision "correct and courageous".

"The government can't bind its hands and judgment," he said on Twitter of the so-called stability clause.

Energy Minister Yuval Steinitz, one of the deal's most vocal advocates, said the decision was "miserable" and would negatively affect Israel's "gas development, energy security, economy,” as well as bring a "loss of income to Israel and its citizens".

Steinitz, who noted the "years of delay" before the deal was formulated and signed, said he nevertheless remained hopeful "there would still be a way to save the natural gas reserves for Israel and its citizens". 

Justice Minister Ayelet Shaked called the ruling a "crude and unnecessary intervention in a government decision".

"It is unacceptable that the government holds the responsibility to the economy and prosperity of the state, but remains without the necessary authority to take action," she said in a statement.

The deal will now have to return to parliament, where its supporters face fierce opposition and a narrow majority that might not ensure its passing in a similar format.

The Noble-Delek consortium is said to have agreed to invest $1.5bn to develop the Leviathan field over the next two years. 

Israel has been trying to extract offshore gas since the discovery of the Tamar and Leviathan fields in 2009 and 2010.

Production has begun in Tamar, but the far larger Leviathan has been hit by a series of delays.

The size of the Leviathan field is estimated at 535 billion cubic metres (bcm) of natural gas, along with 34.1 million barrels of condensate.

Noble and Delek also control Tamar, which holds 250 bcm of natural gas, and lies 80 kilometres west of the Israeli port of Haifa.