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Israeli court opens hearings on contentious gas deal

The Tamar Israeli gas-drill platform in the Mediterranean Sea off Tel Aviv -- Israel has been trying to extract offshore gas since the discovery of the Tamar and Leviathan fields in 2009 and 2010

Israel's Supreme Court began hearings Wednesday on a contentious natural gas deal aimed at tapping major reserves in the Mediterranean that could lead to major shifts in the region's energy supplies.

Critics say the deal between the Israeli government and a consortium including US firm Noble Energy, pushed forward by Prime Minister Benjamin Netanyahu, overly favours the firms involved.

Political manoeuvring by Netanyahu to override anti-trust authorities has also been denounced.

The court was full as judges began hearing five challenges to the complex accord that would lead to the development of the Leviathan field in the eastern Mediterranean, described as one of the biggest recent natural gas discoveries.

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Putting the government's case in favour of the deal, Energy Minister Yuval Steinitz said that with only the Tamar field, west of Haifa, currently pumping gas there were strategic reasons to put the new source online.

"We shall not have energy security as long as we have only one gas field, which is within range of missile fire," from enemies such as Hezbollah in south Lebanon, he said.

Israel's monopolies commission opposed an initial agreement between the government, Noble and its Israeli partner Delek, leading to months of further negotiations under strong political pressure.

Netanyahu signed a new deal on December 17, with the companies having agreed to sell some of their other assets as part of the accord.

- Antitrust objections -

To sidestep antitrust objections, Netanyahu used an obscure clause allowing the deal to be pushed through by the economy minister -- a portfolio he holds.

Previous economy minister Aryeh Deri resigned in November after refusing to overrule monopoly regulators and has since been named interior minister.

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 18.9 trillion cubic feet (535 billion cubic metres, or 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 (40 nautical miles) west of the Israeli port of Haifa.

The discoveries were major boosts to Israel's efforts toward energy independence.

It also intends to export gas from Leviathan to other countries in the region, which could grant Israel strategic leverage.

At a three-way summit in Nicosia last week, Netanyahu said Israel, Greece and Cyprus are to form a committee to study plans to build a pipeline for gas exports to Europe.

Supreme Court approval of the Leviathan deal would allow the consortium to move forward on contracts for gas sales, which could unlock crucial financing needed to develop Leviathan.