East Mediterranean Eyes EU And Global LNG Markets For Gas Sales

Reuters

Europe's efforts to reduce its reliance on Russian energy supplies and booming demand for shipped gas are pushing ahead the development of the East Mediterranean's gas reserves, which have so far been marred by the region's instability.

Israel and Cyprus are both well placed to help diversify Europe's Russian-dominated market by pipeline, while sending liquefied natural gas (LNG) tankers to the world's best paying customers in Asia and Latin America.

Russia's seizure of Ukraine's Crimea region has shaken political relations between Russia and the European Union, and Brussels is stepping up efforts to find new suppliers.

"With recent events in Europe... and the aspiration of different countries to diversify their gas supply, that puts another spotlight on our massive resources and transforms our story into a global one," said Gideon Tadmor, CEO of Avner Oil , a leading explorer in the region, at a conference in Tel Aviv on Tuesday.

Almost one trillion cubic metres of recoverable natural gas has already been discovered in the eastern Mediterranean Levant Basin, enough to supply Europe with gas for over two years and worth between $370-$740 billion in current European or Asian market terms respectively.

Israel, which has so far found over 80 percent of all the gas, has said it would allow 40 percent of its reserves to be exported, while Cyprus will sell almost all of its gas abroad.

10 bids for Leviathan export tender to Turkey

Globes     Amiram Barkat

Bidders include Zorlu Group and a joint bid by Turcas Petrol AS and German electricity utility RWE.

More than ten bids were submitted in the tender by the partners in Leviathan for the export of natural gas to Turkey. The bids for the purchase of natural gas ranged from 7 billion cubic meters (BCM) a year to 10 BCM, amounts that could generate $22-31 billion revenue, assuming a 15-year gas supply contract at $6 per million British Thermal Units (mmBTU), the price of natural gas in Israel's domestic market.

Sources inform ''Globes'' that the bidders in the tender include Zorlu Group, which has stakes in independent power producers in Israel, and a joint bid by Turcas Petrol AS and German electricity utility RWE AG.

Noble Energy Inc. owns 39.66% of Leviathan, Delek Group Ltd. units Avner Oil and Gas LP and Delek Drilling LP each own 22.67% and Ratio Oil Exploration (1992) LP owns 15%.

In January, "Globes" reported that the partners in Leviathan had invited several dozen Turkish companies to bid in a gas supply contract from the gas field. The deal would include laying a pipeline to Turkey from Leviathan's proposed floating production, storage and offloading (FPSO) ship, which deliver gas to Israeli and regional customers. The price in the bids is the purchase price of the gas from the FPSO. In addition to this price, the bids will be evaluated on the basis of their commercial terms, including the take or pay condition and the capacity of the gas purchased.

Some of the bidders are willing to build the pipeline themselves, while others prefer working in partnership with the Leviathan partners. After reviewing the bids in the coming weeks, the partners will hold separate negotiations with the finalists for signing a gas purchase contract.

Source: http://www.globes.co.il/en/article-10-bids-for-leviathan-export-tender-to-turkey-1000926526

Israel set to become major gas exporter

The Financial Times   John Reed

The Tamar deepwater natural gas platform rises 290m from the seabed off Ashdod, in southern Israel, emerging above the waterline only for the last 50 metres or so.

 

The $3.5bn project is described by its investors Delek of Israel and Noble Energy of the US as the largest private sector infrastructure undertaking in Israel’s 65-year history. The gas from Tamar, which began sending its output onshore in late March, will contribute about a percentage point of the country’s gross domestic product this year.

Israel is on the threshold of becoming a major energy power in the Middle East – with potentially game-changing consequences for geopolitics and economic relations in a volatile region – after a court decision unlocked the path to exports.

 

Executives at Delek and Noble told the Financial Times they are fast-tracking discussions on a range of export options for the much larger, still undeveloped Leviathan field, which lies about 30km to Tamar’s west, and holds an estimated 19tn cubic feet of gas – one of the industry’s biggest recent deepwater finds of its kind.

They are moving forward following a decision by Israel’s supreme court in late October to reject petitions brought by civil society groups and opposition politicians who questioned the right of Benjamin Netanyahu’s government to set aside 40 per cent of Israel’s gas windfall for exports without having consulted the Knesset, Israel’s legislature. 

In the pipeline: an Israeli-Turkish reconciliation

Daniel Dombey       Finacial Times

An energy and diplomacy deal that would reshape the map of the eastern Mediterranean might be proceeding faster than many people think.

It is just a few weeks since, in a bid to revive frozen diplomatic ties, Israel apologised to Turkey for a deadly raid that left nine Turkish citizens dead. The process was still sufficiently shaky for US Secretary of State John Kerry to come to Istanbul last weekend to chivvy both sides to go all the way and exchange ambassadors.

There are plenty of potential slips on the way ahead: compensation has to be agreed; the fate of Turkish court cases against retired Israeli commanders has to be decided (at present, they are going ahead); and Ankara still has to pronounce itself satisfied with the lifting of restrictions on civilian goods to Gaza (relevant, because the flotilla stormed by Israeli Defence Forces in 2010 was seeking to break the Gaza blockade).

But it is becoming increasingly apparent that both governments are actively interested in sealing the tentative rapprochement with a deal under which gas-rich Israel would supply energy-hungry Turkey. Moreover, such considerations probably played a part in producing the reconciliation in the first place.

Israel eyes gas exports to neighbours

John Reed   Financial Times

A leading investor in Israel’s natural gas sector said initial talks were under way on exporting some of the country’s abundant offshore reserves to Turkey, Jordan, Egypt, and a proposed power plant in the West Bank.

Yossi Abu, chief executive of Delek Drilling, said the sector was poised to take part in a “new geopolitical opportunity” and was looking at possibilities to export gas via pipelines from offshore fields such as the big, unexploited Leviathan reserve to Israel’s regional neighbours and possibly – via Turkey – to Europe.
“There is a significant commercial basis to supply gas from Leviathan and other discoveries offshore Israel to Turkey, Jordan, the Palestinian Authority, and even Egypt,” Mr Abu told the Financial Times in an interview.

He added: “We have discussions – I cannot give you names – with potential customers in our region.”

Mr Abu’s remarks add weight to those from Israeli, Turkish and other government and private-sector figures recently, suggesting that talks on regional gas projects that would re-shape the Middle Eastern energy map are advancing quickly.

Israel apologised to Turkey last month for a fatal 2010 storming of a boat off Gaza, and the political rapprochement has raised the prospect of a thaw in trading relations between two of the Middle East’s biggest economies.

“We believe that there is a real opportunity to supply gas to the Turkish market, and maybe through the Turkish market to the European market,” Mr Abu said. “Also, there’s a real opportunity to supply gas to Jordan.”

These three energy pipelines could shake up geopolitics

Steve Le Vine        QUARTZ

Three of the most volatile parts of the Middle East—Iran, Iraq and Israel—are the scene of oil and gas initiatives that could shake up geopolitics there and beyond. The efforts center on three energy pipelines, at least two of which seem likely to be built.

The first is an attempt by Iran to supply Pakistan with natural gas. On March 11, Pakistani President Asif Zardari and Iranian President Mahmoud Ahmadinejad inaugurated the construction of a new section of a proposed 1,200-mile pipeline connecting the two countries. Iran claims its own section of the line is almost finished, starting from the giant South Pars natural gas field—the world’s largest—and going to the border with Pakistan. The ceremony marked the start of construction of the 485-mile Pakistani leg. Iran is offering $500 million in finance toward the estimated $1.5 billion cost of the Pakistan portion, according to the Pakistanis.

If the pipeline is successful—the longest shot of the three considering Western-led sanctions against Iran—it will provide an economic jolt for gas-starved Pakistan. If the line is extended to India, it could also help to soften India-Pakistani friction, the underlying cause of South Asian instability. It also would create a new economic belt stretching from the Middle East to the depths of the subcontinent.

Turkey-Israel gas pipeline deal ?

Turkish companies and western multinationals operating there are expressing an interest in purchasing gas from Israel’s Leviathan gas field, media outlets in both countries are reporting.

“The Turks are interested in buying Israeli gas, they refuse to buy Cypriot gas, but any pipeline from Israel to Turkey would run through Cyprus's exclusive economic zone,” Israel’s Haaretz reported.

An Israeli-Turkish undersea pipeline would be 600km long and cost an estimated $2 billion, the paper said.

Other reports said that, in addition to the Leviathan partners - Noble, the Delek Group and Ratio Oil Exploration - the Israeli Prime Minister's Office, Ministry of Foreign Affairs, and the Ministry of Energy and Water Resources have been informed about the contacts.

Turkish conglomerate Zorlu Group is said to be lobbying Israel to approve energy exports to Turkey.

Zorlu's reported plan is to lay an undersea pipeline from the Leviathan field 130km off Haifa to Turkey's south coast.

The conglomerate has interests in textiles, communications, energy and real estate, and is considered one of Turkey's biggest consumers of natural gas. In Israel, it owns a 25 per cent stake in Dorad Energy, which is developing a private power plant in Ashkelon.