FIRST TAKE: Israeli gas production outages BULLISH for JKM, NWE, TTF – for now only on sentiment Laurent Ruseckas *Israel’s energy ministry confirmed June 13 that production at the Leviathan and Karish platforms has been “temporarily suspended” *The production curtailment affecting about 50 MMcm/d (1.8 Bcf/d) will quickly halt all Israeli exports to Egypt and Jordan, which together amount to 35 MMcm/d (1.2 Bcf/d) *There will be no immediate impact on LNG demand owing to infrastructure constraints; additional demand for cargoes could build quickly if the Israeli outages persist Iranian retaliation against Israel has reportedly begun after the latter's massive strike against targets associated with Iran's nuclear program. The resulting suspension of production at two of Israel's three offshore gas production platforms is BULLISH for prices – initially on sentiment, and if extended, because of the resulting extra demand pull from Egypt and Jordan as they seek to replace Israeli pipeline imports. The October 2023 shutdown of the Tamar platform for security reasons lasted for 36 days under very different circumstances. Our best guess is that today’s shutdowns are precautionary and will last only until the conclusion of a finite Iranian retaliatory response. A scenario (less likely in our view) of a wider regional war could bring a much longer shutdown. Even assuming Israeli gas exports to Egypt and Jordan cease immediately, there will be no immediate impact on these two countries’ demand for LNG cargoes. The only currently operational FSRU between the two countries, the Hoegh Galleon moored at the Egyptian port of Ain Sokhna, is already operating at full capacity as Egypt’s import requirements have spiked. The Energos Eskimo departed Jordan for Ain Sokhna on June 4 but is not yet operating; neither is the Energos Power, now moored near Alexandria. Both of these FSRUs are undergoing maintenance before being connected to the Egyptian gas grid. For now, both Egypt and Jordan will have to ration gas supply and turn to fuel oil to make up for the curtailed Israeli gas. Assuming that the vessel maintenance currently underway can be postponed, one or both of the Energos vessels could be brought into operation quickly – if their connections to the Egyptian grid are ready, which is not clear (we assume Ain Sokhna at least is ready to take additional gas). To fully replace Israeli pipeline imports, Egypt and Jordan between them would require another 10-12 LNG cargoes per month – enough to put upward pressure on NWE (the NW Europe LNG benchmark reflecting the Atlantic Basin market), TTF, and JKM. Read on PlattsConnect: https://tinyurl.com/36pfdmwe