The drive to start building the infrastructure to produce, store, distribute and export the gas from the big Leviathan and Tamar fields 60 miles off the northern port city of Haifa is likely to intensify a dispute with neighboring Lebanon over the fields.
So will the prospect of finding as much as 3 billion barrels of oil in deeper strata under the gas layers in Leviathan at 19,000-26,000 feet.
The U.S. Geological Survey estimated that more than 122 trillion cubic feet of gas and around 4 billion barrels of oil lie under the continental shelf that runs south from Syria, Lebanon, Israel, the Gaza Strip and Egypt.
Israel disclosed last week that it deployed unmanned aerial vehicles over the offshore fields to keep them under round-the-clock surveillance amid threats by Lebanon's Hezbollah, a powerful militant group backed by Iran and Syria.
"We warn Israel against extending its hands to this area and steal Lebanon's resources from Lebanese waters," Hezbollah leader Hassan Nasrallah declared.
He threatened to attack Israel's energy installations if any moves were made to encroach on Lebanese waters.
"Whoever harms our future oil facilities in Lebanese territorial waters, its own facilities will be targeted," he warned.
But since Israel's supply of gas from peace-partner Egypt is in jeopardy following the fall of President Hosni Mubarak in February amid pro-democracy uprisings across the Arab world, Israel's offshore fields have become indispensable.
Israel's Globes business daily reported that Noble Energy of Houston, and its Israeli partner the Delek Group, is looking at Cyprus as the site of the plant.
Noble Energy plans to drill exploratory wells off that island, divided between Greek and Turkish communities. That area abuts the same gas reservoir in which the Leviathan field is located.
Leviathan contains an estimated 16 trillion cubic feet of gas. The nearby Tamar field holds another 8.6 tcf.
Cyprus is widely seen as the most likely site for an LNG plant, particularly if gas fields are found in its waters, from where the gas could be shipped in tankers to the European Union, which seeks to reduce its dependence on Russian gas supplies.
Nobel Energy holds 100 percent of the yet unexplored Cyprus A zone called Block 12. Exploratory wells are scheduled and the results are likely to determine where the proposed LNG plant will be located.
LNG is natural gas that's been converted temporarily to liquid form for ease of storage and transport, usually by sea vessels.
The Israeli government favors an LNG plant at Dor Beach, north of Hadera and near Leviathan and Tamar, and other possible fields being explored.
New wells are being drilled in Leviathan to determine the extent of the reservoir. After production tests, Noble and Delek plan to drill under the gas layer to examine oil-bearing strata at 16,400-23,600 feet.
Earlier this year, Israel and Cyprus agreed to equally divide the 155 miles of water that separate them.
The Israeli gas fields are adjacent to Cypriot and Lebanese waters but no agreement has been reached by Israel and Lebanon, which are technically in a state of war.
That was evidenced by a 34-day conflict between Hezbollah and the Jewish state in the summer of 2006. There are concerns that another conflict is likely to erupt, possibly with the disputed gas fields as the catalyst.
Lebanon claims that Leviathan partly lies in Lebanon's maritime economic zone.
But Israel, with no energy resources until it made the gas finds in 2009, challenges that. It has warned it will use force to protect its energy riches that will transform its economy.
The Lebanese Parliament approved a draft law unilaterally demarcating the maritime border with Israel, which flatly dismissed Beirut's move. Lebanon plans to challenge Israel's claim at the United Nations.
U.S. oil companies, along with firm from other countries, were reported to be preparing exploration proposals for Lebanon but the threat of renewed conflict has scared off many potential investors.