Israeli PM announces major gas agreement to develop gas fields

Israel's government said on Thursday it reached an agreement with U.S. and Israeli gas companies on the development of the country's newly found natural gas fields.

"The agreement will bring in hundreds of billions of shekels to the citizens of Israel over the coming years," Prime Minister Benjamin Netanyahu said in a televised statement. (One shekel equals about 0.26 U.S. dollar)

He added that the deal will be brought for vote in the cabinet's weekly meeting on Sunday.

The controversial agreement will allow Texas-based Noble Energy and Israel-Based Delek Group to keep their ownership in Leviathan, Israel's largest natural gas field.

However, after six years, Delek will have to sell its stakes in another gas filed, Tamar, and Noble will be required to dilute its stakes down to 25 percent.

Currently, Noble Energy and Delek Group control all of Israel's four offshore gas fields, including two smaller fields called Karish and Tanin.

The deal has been triggering wide public criticism since it was initially revealed in June. According to critics, the deal still leaves too much power in the hands of Noble and Delek, which creates a concentrated energy market with higher prices for consumers.

Leviathan was discovered offshore Israel in 2010 and holds an estimated 22 trillion cubic feet of natural gas. Production was expected to begin in 2018, but its development has been stalled by the controversy over its ownership.

Tamar was discovered offshore Israel in 2009. Gas production at the 10 trillion cubic feet natural gas field kicked off in March 2013.

Noble and Delek have already signed deals to sell gas to Egypt, Jordan and the Palestinian National Authority.