A Spanish and Italian partnership is exploring a possible boost in natural gas purchases from producers based in Israel in an agreement that could increase output and bring a long-running legal fight in the Eastern Mediterranean to an end.
Интервью с Джорджем Пападопулосом, одним из советников Трампа по внешней политике. Он рекомендует Израилю забыть о Турции и сосредоточиться на Египте, а также говорит, что через три года США войдут в тройку лидеров по экспорту газа. Запомните 2016 год как время исторической значимости. США становятся важным игроком на рынке экспорта сжиженного газа, а к концу десятилетия выйдут на третье место в мире по объему экспорта, после Катара и Австралии», — говорит Джордж Пападопулос (George Papadopoulos), новый советник потенциального кандидата в президенты США от Республиканской партии Дональда Трампа.
The Tamar gas field may be upgraded at a cost of between $1.5 billion and $2 billion, including the construction of an underwater pipeline to a plant in Egypt run by Spain’s Union Fenosa Gas, the partners that own and operate the field said Thursday. The partners are considering expanding production with three new wells and upgrading a production platform near Ashkelon, with the aim of doubling the field’s capacity to 20 billion cubic meters annually, said Delek Group, which owns Tamar together with Noble Energy of Texas and Israel’s Isramco and Dor Alon. The pipeline is contingent on the partners signing a supply deal with UFG, it said. Delek said the expansion program is to be in place by 2017. Shares of Delek Drilling and Avner, the two Delek Group units with stakes in the Tamar field, rose by 1.1% to 19.20 shekels ($5) and 0.8% to 3.43 shekels, respectively, in Tel Aviv Stock Exchange trading Thursday. MORE
The last days further turned the spotlight on two areas: the East Mediterranean and the Baltic countries, with some more relevant news coming from Croatia, Russia and the United Kingdom. The current debate about European legislation made the headlines too. The most unexpected news has to do with some declarations about Eni’s participation in the South Stream project. The Italian company will continue to engage in South Stream if required investment does not exceed 600 million euros, otherwise it will consider leaving the project, Eni CEO Claudio Descalzi said on Tuesday. South Stream is the bone of contention between Budapest and Brussels. Hungary will continue supporting European sanctions on Russia, while preserving its political and economic ties with the Kremlin on issues such as the Russia-led South Stream natural gas pipeline project. Pavel Zavalny, President of the Russian Gas Society and Deputy Chairman of the State Duma Committee on Energy, sent his views on the issue to Natural Gas Europe. According to Zavalny, the project would be a real pan-European project, facilitating the integration of the regional gas markets. European integration had been debated also in other contests. The topic was the main topic of a conference in Berlin, in which speakers suggested that signs of market integration are often underestimated despite the problems. ENTSOG also added that opposite interests are hindering its efforts to come up with a Network Code on Harmonised Transmission Tariff Structures for Gas (TAR NC), a cornerstone of the integration process. ENTSOG said that some positive signs come from the way European TSOs are involved in early implementation practices in issues related to Network Code on Capacity Allocation Mechanisms (CAM NC). The Baltic countries are moving forward with their plans to step up integration efforts. The fact that Finland is becoming the majority shareholder of Gasum clearly indicates that the geopolitical dimension of the European still matters. The attention paid by Finland’s Alexander Stubb and Estonia’s Taavi Rõivas is a further proof. The two countries inching towards an agreement on laying a gas pipeline between the two countries and building an LNG terminals on both sides of the Gulf. Similarly, also the East Mediterranean are progressing with the negotiations. For instance, partners in the Tamar field agreed with Union Fenosa Gas (UFG) on continuing negotiations for supplies of natural gas. They see a deal within six months. An eventual renewed interest on the area would also have an impact on the role of Greece. Its geostrategic location on the map offers a number of advantages, which can translate to an economic competitive advantage, as well as to an upgrade of its geopolitical role in South-East Europe. It comes as no surprise that Azerbaijan’s SOCAR is committed to its plan to acquire a majority stake in DESFA. SOCAR said the Commission is opening a “Phase II” in-depth investigation into the proposed transaction, with a final decision to be taken within 90 working days. Meanwhile, Höegh LNG announced the signing of a contract with EGAS of Egypt for a floating storage and regasification unit (FSRU). Croatia is trying to take advantage of the situation with its first offshore licensing round. Over the last days, Zagreb said that it will decide the best offshore bidders by mid-December. The country is intentioned to cut its gas import needs, despite some hurdles on the way hindering Croatian efforts. On the other hand, the British took advantage of its experience. The UK government announced 134 licences covering 252 block in the 28th offshore licensing round, adding that an additional 40% could be added later on after environmental assessments. UK-based IGas revised its shale GIIP estimates after announcing results of its exploration well at Barton Moss in PEDL 193 in the North West of England. Against this backdrop, Ukraine and Russia remain at loggerheads. Naftogaz clarified that it will prefer gas from the EU to Russian gas. Only in case of excess demand will we make use of our right to buy gas from Gazprom, Naftogaz’ CEO Andrei Kobolye, commented. Russia in the while is trying to maintain its centrality on the European gas markets, strengthening its ties with Azerbaijan and starting price negotiations with PGNiG. Sergio Matalucci Sergio Matalucci is an Associate Partner at Natural Gas Europe. Follow him on Twitter:[email protected]
On Thursday, partners in the Tamar field agreed with Union Fenosa Gas (UFG) on continuing negotiations for supplies of natural gas. ‘The Partnerships are pleased to update that on November 5, 2014, the Tamar Partners together with UFG agreed to extend the above mentioned period in order to continue negotiation which is in advanced stages towards completion and signing of the Binging Agreement,’ reads the note released on Thursday. The partners in the field are Noble Energy Mediterranean (36.00%), Isramco Negev 2 (28.75%), Avner Oil Exploration (15.625%), Delek Drilling (15.625%), Dor Gas Exploration (4.00%). In October, US-based Noble Energy and Israel-headquartered Delek Group announced their intention to sign an export deal with Egypt. Also on Thursday, RWE appointed Paul van Son as Country Chair in Dubai to increase the German company’s presence in the MENA/Turkey region from January 2015. ‘This increased involvement in the region will be a key component of international business development for RWE. Paul van Son will report directly to the CEO of RWE AG,’ the company wrote on its website.
After years of dependence on natural gas supplies from its Egyptian neighbour, Israel now finds itself on the other side of the table. The gas will flow from Israel’s Tamar field to Egypt in the same pipeline that historically delivered gas in the opposite direction. The Tamar partners said to be discussing the sale of 5 billion cubic metres (bcm) of gas over three years to private customers in Egypt. The partners in Israel’s second largest discovery are also in talks to provide an annual 4.5 bcm of gas for 15 years to Union Fenosa Gas for its liquefied natural gas (LNG) plant in Egypt and a total of 1.8 bcm over 15 years to Jordan. The partners in the Leviathan, Israel’s largest field estimated at 21 Tcf, are also negotiating a deal with BG Group to export 7 bcm of gas a year over 15 years for their LNG plant in Egypt. The planned sales of natural gas by Israel to Egypt find their explanation in Egypt’s severe need for natural gas and its unused LNG export terminals. The Arab neighbour had mismanaged its indigenous production of natural gas by committing to gas export deals with Israel and Jordan that harmed local consumption and led the government to dishonour the agreements. Now Egypt is suffering from domestic shortfalls at home and fears that electricity shortages will increase domestic unrest and create further political tensions. Egypt’s export terminals also constitute an opportunity for Israel looking to market its gas in global markets. The termination of Israel’s talks with Australia’s Woodside was the confirmation that Israel does not have an immediate plan to construct its own LNG terminal and would rather opt for alternative export routes. Using Egypt’s LNG export terminals would allow Israel to reach global markets without having to embark in the costly and timely endeavour of building its own terminal. Noble’s talks with Jordan’s State Owned Electricity Co. are also the indication that Israel will be seizing regional opportunities by supplying gas to thirsty arab neighbours. Jordan too suffered from the disruption in the flow of Egyptian gas and is now undergoing a severe energy crisis. Despite national plans to develop indigenous resources and diversifying the energy portfolio to include renewable and nuclear sources. the Kingdom needs immediate relief and importing gas from adjacent Israel would help ease a spiking energy bills suffering from expensive imports. The potential deals between Israel and its Arab neighbours are commercially sensible, albeit politically sensitive. Final agreements will be subject to regulatory approvals from the authorities involved. However, looking at how Jordan announced the potential deal to its public as an agreement between Jordan’s state owned electricity company and an American company (Noble), and the sabotages to the pipeline transporting gas from Egypt to Israel in 2011, it is no guarantee at all that the deals will go through smoothly. Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. She reads International Relations and Contemporary War at King's College London focusing on Natural Resources and Conflict. She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. [email protected] her on Twitter: @karenayat
В связи с профилактическими работами RED UNION FENOSA временно приостановит подачу электричества некоторым потребителям на территории автономии.
A 72-hour truce ended on Friday, causing the violence between Israel and Gaza to resume. Ceasefire efforts brokered by Egypt were able to secure another cessation of hostilities, albeit only temporary.. With no sight of a real solution to the problem, the probability of a pipeline from the Leviathan to Turkey is decreasing by the day. Turkey’s Energy Minister said: “If a pipeline is built from Israel, it will flow not with gas but with the blood of innocent children and mothers,” as reported by Hurriyet. The diplomatic ties between Israel and Turkey were headed towards normalisation since the March 2013 US-brokered apology by Prime Minister Netanyahu to the Turks over the Mavi Marmara incident. The Israelis had also fulfilled the second condition imposed by the Turks by committing to compensate the families of the nine victims who were killed on board of the Mavi Marmara ship that was headed to Gaza to break the blockage and bring humanitarian aid to the people of Gaza. The amount of the compensation was yet to be determined by Israel. The third condition imposed by the Turks to resume diplomatic ties with Israel was the lifting of the blockade on Gaza. Energy experts believe that Turkey would benefit economically from an energy deal with Israel and would realise its energy hub ambition by connecting the East Med to Europe. Turkey’s stance on Gaza has however remained unchanged throughout the years, and whether it stems from noble principles or pure populism is debatable.Another obstacle to an Israel-Turkey deal would be the problem of the division of Cyprus, Cypriot officials insist that any energy collaboration between Turkey and Israel needs the approval of the Republic of Cyprus. Since Israel’s action in Gaza, the Israeli-Turkish relation has regressed. Israel has yet to find a way to transport its large amounts of natural gas to export markets. Egypt has played a role in brokering the talks between Israel and Gaza proving that Israel and Egypt maintain full diplomatic relations. Egypt could play the role of a corridor to facilitate the transportation of Israeli gas to export markets namely Europe and Asia. Egypt has unused export facilities that could be used by Israel. On June 27 the Leviathan partners signed a letter of intent to hold talks with a subsidiary of BG Group PLC about supplying the company’s gas liquefying plant in Egypt. The Tamar partners also signed on May 5 a non-binding agreement of intent to sell gas from the Tamar field to Union Fenosa Gas SA’s liquefied natural gas plant in Egypt. Historically, Israel received most of its natural gas needs from Egypt until the 2011 Egyptian revolution caused repeated sabotaging of the pipeline transporting gas from Egypt to Israel. Egypt is now suffering from its own energy problems as it undergoes severe shortages of natural gas due to flat production, growing consumption and ongoing export obligations. An energy deal between the two countries seems to be the optimal solution for the Israel’s quick, low cost and simple access to LNG markets. Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Email Karen [email protected] Follow her on Twitter: @karenayat
Israel’s export strategy has been the object of various speculations since the country’s Supreme Court ratified in October 2013 a June 2013 decision by Netanyahu’s cabinet to export about 40% of the country’s offshore natural gas reserves. Based on a total estimate of 900 billion cubic meters (BCM), the Israeli government in June decided to allocate 540 billion cubic meters (BCM) for the domestic market and allow the export of the remainder. But how will Israel reach export markets, via which route and using which technology? Noble Energy, the operator of Israel’s giant Leviathan field - which estimate was recently increased to 21.95 trillion cubic feet (Tcf) from 18.91 Tcf- has been studying various export options including LNG and pipeline scenarios. Israel has announced that it will start by exporting some of its natural gas to its immediate neighbours: Egypt, Jordan and the Palestinian Authority. Israel’s neighbours are in fact in need of the product and could import Israeli natural gas via pipeline. Egypt had historically been the main natural gas supplier for both Israel and Jordan until the Arab uprising in 2011 that led to the sabotage of the pipeline transporting Egyptian gas to Jordan and Israel. Egypt is now suffering from domestic shortages due to increasing Egyptian consumption, ongoing export obligations and flat production. In the absence of Egyptian gas, Jordan too entered a severe energy crisis that forced the Kingdom to import expensive fuel products and implement efforts to develop indigenous resources that include wind and solar, shale oil, natural gas and nuclear. Selling gas to its immediate surrounding via pipeline will only slightly reduce Israel’s export quota. Israel will look to reach further markets with larger appetites: Europe and Asia. The Leviathan partners considered selling part of the Leviathan (25-30%) to the Australian firm Woodside in exchange of its LNG expertise, as LNG will offer Israel the flexibility to reach lucrative markets regardless for their geographical locations. However, the negotiations between Israel and Woodside failed to reach an agreement due to the Israeli authorities rigid positioning in regards to tax and the parties’ failure to agree on the field development costs. Using Cyprus’ planned LNG terminal at Vassilikos to reach export markets was also advanced as an option but Israel has not expressed a decision to pool costs with the island for the construction of the multi-billion dollar facility and seems to have opted for alternative routes. A pipeline from Israel to the Turkish coast would give Israel access to Turkey’s internal market and Europe. Israel’s March 2013 reconciliation with the Turks over the Mavi Marmara incident led to believe that the likelihood of a Leviathan-Turkey pipeline was increasing. Turkey, with a large and growing domestic demand and expiring contracts is an attractive customer. Turkey could also serve as a gateway to Europe. However, various obstacles stand in the way of such a deal: the division of Cyprus and the deteriorated relations between Turkey and Israel. Firstly, Cypriot officials repeatedly expressed their opposition to an Israeli-Turkish deal that would bypass their agreement given that such a pipeline would have to cross Cyprus’ EEZ (to avoid Lebanese and Syrian waters). Secondly, the historically strong diplomatic ties between Israel and Turkey soured in 2010 following the Mavi Marmara incident that led to the killing of nine Turks on board of the ship. The renewal of the friendship became contingent on three conditions set by the Turks: Israel’s apology to Turkey, a financial compensation to the families of the victims and the lifting of the Gaza blockade. Netanyahu apologized to Turkey in March 2013 and promised to financially compensate the families of the victims. However, the ongoing Israeli assault on Gaza will no doubt impede the normalisation of the diplomatic relations between Israel and Turkey, and hence cause a major obstacle to the Leviathan-Turkey pipeline. Does Erdogan’s harsh speech stem from noble principles or is it animated by populism and the desire to please Arab friends? And did Israel lose its interest in resuscitating its friendship with the Turks? Has Israel decided that it will use Egypt’s export terminals instead and given up on pleasing Turkey? Currently, Egypt seems to be Israel’s only access to energy markets. Israel’s Tamar and Leviathan partners have signed letters of intent to sell respectively 4.4 BCM and 7 BCM annually to Union Fenosa and BG. The gas will be delivered to Egypt via pipeline and then headed to Asian markets. The deals are expected to be signed by the end of 2014. Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Email Karen [email protected] Follow her on Twitter: @karenayat
Работы по реконструкции системы уличного освещения начались в Комрате. Необходимость установки ламп освещения вызвана тем, что компания «Union Fenosa» в этом году приступила к реконструкции своих электросетей: замене электроопор, замена проводов на кабель.
Natural Gas Europe had the pleasure to speak with Sohbet Karbuz, Director of the Hydrocarbons division at Observatoire Mediterraneen de l’Energie (an energy industry association). We spoke about the coming Italian presidency of the Council of the European Union, E&P activities in the Mediterranean, and the role of Eastern Mediterranean for European energy security. “It is time for the EU to reconsider its neighbourhood policy. Instead of talking to talk, the EU must start walking the walk,” Karbuz suggested. In the aftermath of the European elections, Karbuz’s message sounds resounding. During a recent conference, you said that the Mediterranean gas could be left aside between the Italian and the Cypriot presidency of the Council of the European Union. What could be the consequences of such a low interest in Mediterranean gas? Between the Italian presidency in the second half of this year and Cyprus presidency in 2023, there will be only Malta (in 2017) as a Mediterranean country guiding the EU. I personally do not expect Malta will be pushing for energy cooperation in the Mediterranean region as top EU issue during its presidency. And in between years, no Mediterranean country will lead the EU. And the chances for any non-Mediterranean country making Mediterranean energy issues as a top EU issue are extremely low. I am sceptical whether the EU is really serious about its gas supply security. Potentially the same amount of gas could arrive at the EU from the East Mediterranean as the Azerbaijan through southern corridor by the early 2020s. We see similar reluctance from the EU for the North African countries. I don’t have the answer but in my opinion it is time for the EU to reconsider its neighbourhood policy. Instead of talking to talk the EU must start walking the walk. In this sense, do you think the Greek presidency did enough? Do you think that the Italian presidency can set up an agenda favourable to new explorations? What are the cards that it could play? What are the cards that it should play? Greeks had good intentions but perhaps due to their domestic problems they couldn’t achieve any tangible progress in the Mediterranean energy cooperation. Italians are already working on the incoming EU Presidency priorities and EU roadmap. Regional energy cooperation is expected to be among the top issues. They could bring Mediterranean energy opportunities and challenges forward and create platform to discuss and exchange views with the participation of energy companies. Time will show whether they will walk the walk. What is your understanding of E&P activities in the Mediterranean? Some interesting projects are emerging, do you agree? Traditionally E&P activities in the Mediterranean region were focused on the area from Algeria to Egypt. But in the last five years we have been witnessing an emerging activity in the east Mediterranean. After the discovery of large gas fields in Israel and Cyprus, more and more activity in terms of both seismic imaging and exploration bidding rounds as well as awarding several acreages has been taking place, notably in Croatia, Montenegro, Italy, Malta, Turkey and Greece. This means offshore Eastern Mediterranean is turning into an attractive and promising place for E&P activities. In this context, can the Eastern Mediterranean gas represent a solution to European problems? Europe is very much concerned about diversifying its gas supply sources after the Ukraine crisis. However, we have to be realistic. East Mediterranean cannot represent a solution to European gas problem both time wise and volume wise. Time wise because it would be too optimistic to expect gas exports from the region to Europe before 2020. Volume wise because Eastmed could export maximum 8 to 10 bcm per year from the discovered fields in Israel and Cyprus, assuming all exports will target the markets in Europe. Now, whether this 10 bcm is a remedy for Europe’s gas headache is another question. The answer is, again, no. Gazprom exported 137 bcm of gas to Europe in 2013. Gazprom’s long term contracts with European buyers indicate that this level should more or less be maintained at least another 10 years. So, Eastmed gas export potential of 10 bcm to Europe is less than 10% of existing Gazprom contracts with European buyers. What Eastmed gas can do however is to help Europe diversify its supply sources and routes. And that can happen only in the next decade. Do you think Israel is genuinely interested in participating in Cyprus’ LNG terminal? What are the main geopolitical problems related to this partnership? Participating in an onshore LNG plant in Cyprus is only one of the options. However, the Leviathan partners so far indicate that Cyprus LNG is not on the top of their options. Their first option - in line with the Israeli government’s intention - is to start with supplying gas to regional markets - Palestine, Jordan and perhaps Egypt and Cyprus. Then comes the possibility of exporting gas by using the LNG plants in Egypt - there is already ongoing discussion on this issue between Leviathan partners and Union Fenosa Gas). These are rather shorter term export plans which could be realized before the end of this decade. However, the desired export option in larger volumes in the mid to longer terms is through floating LNG. If politics allow an export pipeline to Turkey (either crossing or bypassing onshore Cyprus) and Cyprus LNG plant will allow Israel to diversify its export routes. For the pipeline option (from Israel to Turkey,) two conditions have to be met: Normalization of Turkey-Israel diplomatic relations and resolving the Cyprus Problem. On both issues, we may see extraordinary progress between now and end of 2015. The progress in those two issues will, directly or indirectly, have implications in Israel’s plans to participate in Cyprus LNG. Croatia launched its first offshore licensing round in April, offering twenty-nine blocks. What’s your viewpoint on the decision? Can Croatia become an important regional hub? What are the hurdles? Some maritime disputes have not yet been resolved in the area, but I am quite optimistic that the relevant parties will achieve a mutually acceptable formulation. It is too early and perhaps too much to expect Croatia to become a regional hub. This is not due to the expectations that no substantial amount of hydrocarbons will be discovered there, but because in addition to infrastructure, challenges related to technical, financial and human capital will require some time to overcome. We could expect Italy to emerge a regional hub and perhaps also Greece but Croatia would need much more time. You referred to the fact that Slovenia formulated on April 2 an objection to ‘the use of geographical maps of the Adriatic Sea that unilaterally prejudge the solution of the maritime border between Slovenia and Croatia included in the tender documentation for the offshore licensing round for licenses for the exploration and production of hydrocarbons.’ That followed Croatia’s launch of its bidding round, Do you see any major problems coming out of this? I am quite optimistic that both EU member states will find a mutually acceptable solution without going into any painful process. Turkey intends to become a hub for investments in African energy assets. Do you think that this intention is realistic? Do you think that it could create room for other Mediterranean countries to participate? I don’t know what you mean with the term hub here. Turkey imports oil and gas from some North and West African countries but there is no oil and gas pipelines that connect Turkey with those suppliers. Also in the future I do not expect any oil connection. However, if a north African gas ring were established and connected for instance to the Arab Gas Pipeline (currently extends from Egypt to the border of Turkey with Syria), and if Libyan and Egyptian future gas exports were arrived to Turkey, then maybe. But here there are too many ifs and a time frame of at least 15 years. What about Turkish investments in Africa? Turkish companies could invest in Africa extensively in wide ranging sectors from upstream hydrocarbons to electricity generation as well as infrastructure development. But even then, it would be wishing thinking that Turkey would surpass China in terms of investment in Africa. Do you see any room for increased cooperation between Turkey and North African countries? There is already intensifying energy cooperation between Turkey and North African countries (from Morocco to Egypt), particularly in electricity and upstream markets. We can expect this cooperation to increase in the future. Would your assessment be the same in case Gaddafi was still leading Libya? It may sound weird but I think under Gaddafi Turkey had better chance to increase energy cooperation with Libya and take a bigger share in the energy sector of the country. Generally speaking, what is the role of North African countries? Do you think Algeria can easily step up oil and gas production? Algeria could potentially increase its gas production but what really important is the export potential. A large portion of Algerian gross gas production is used for reinjection. Therefore, when talking about production in Algeria, it is better to concentrate on marketed production. Part of marketed (or net) production is used domestically and part is exported. Algeria is facing pressure to boost net natural gas output to meet growing domestic demand and fulfil long-term contractual obligations to export natural gas. Whatever the reserves position is, gas projects in Algeria have been affected by delays resulting from the inertia that hit Sonatrach in the wake of corruption allegations, uncertainties surrounding the security of oil and gas facilities and slow decision making process particularly on the upstream development projects due to the high degree of centralisation of decision-making. There is still uncertainty over the timeline and the development of several production and infrastructure projects. The target date for increasing the country’s gas exports to 85 bcm/yr by 2010 has already been missed. Other pronounced targets were 100 bcm/yr and even 120 bcm/yr by 2015. These previous targets were mistakenly focusing on export infrastructure, and not the realities. Announced plans to increase gas export potential to 100 bcm or more by 2015 or later appear to be rather optimistic, both in terms of volume and timing. These targets are unlikely to be met. Recent declarations by Algerian's officials underline Algeria's will to give a renewed impetus to foreign investment in exploration and to attract international partners capable of helping Algeria increase its hydrocarbon reserves and production. Algeria could potentially increase its gas (and to a lesser extent crude oil) production assuming that the government attracts foreign investors. What about Libya? In Libya natural gas didn’t get enough attention it deserved. The gas sector still remains largely underdeveloped. Marketed gas output, mostly onshore, has followed oil production, considering the fact that most of the gas is produced in association with crude oil. Besides, almost half of gross production is re-injected or flared). In the future, most of the gas output is expected to come from non-associated fields while the production of associated reservoirs is expected to decline with every passing year. However, to attain a considerable increase in production would surely require big investments. And for that security environment must improve a lot. And Egypt? As for Egypt, the imbalance between production and consumption we have been witnessing in recent years is expected to continue for a while. However, in the longer term we can easily be optimistic that the country will continue to remain as a net gas exporter before its exports shrinks again towards the end of the next decade. Sergio Matalucci
Woodside’s withdrawal from the Leviathan deal leaves the door open to various speculations regarding Israel’s export strategy. The parties were engaged in serious talks that could have led to the Australian giant acquiring f 25% of the Leviathan - a 19 Tcf field located 130 kilometers of Haifa, in waters 1,500 meters deep and operated by Noble Energy. The parties had previously signed an MOU on February 7 preparing for the final signing in March 27. The closing of the deal failed to happen as expected in March due to a disagreement between the company and the Israeli Tax Authority. Despite Woodside and the Leviathan’s partners pledge to pursue their pourparlers, they recently declared the end of the negotiations saying they had ‘failed to reach a commercially acceptable outcome’. Woodside and the Leviathan partners' decision to part ways has numerous ramifications. The Australian company would have brought in its LNG expertise. Without it, it is unlikely that Israel will opt for an onshore LNG terminal to export its natural gas to export markets. If Israel did not prove to be too lenient towards Woodside, it is perhaps because the newly hydrocarbon-rich country has other plans for itself. And it is not to be dismissed that it might be inclined to diversify its export routes to ensure its robustness vis-à-vis adversity. Such a philosophy would not be hazardous; in fact, Israel suffered for a long period of time from its dependence on Egyptian gas supplies. The disruption in the flow of gas from its Egyptian neighbour due to the sabotage of the Arab Gas Pipeline was a wake-up call for Israel to achieve energy independence and strengthen its energy security. When it comes to export routes, and given the complicated geopolitics of the region, a combination of various scenarios is foreseeable. Jordan too experienced a similar vulnerability towards Egypt, given that the Hashemite Kingdom has been also highly reliant on imports from Egypt to satisfy domestic demand. Jordan too suffered from the disruption in the flow of gas in the aftermath of the Arab Spring and is currently undergoing a severe energy crisis due to that. Israel, taking advantage of the momentum, and whilst it studies possible solution to reach further markets, decided to start by exporting to its immediate neighbours: a Jordan in desperate need of cheap natural gas imports to substitute the Egyptian gas, an Egypt suffering from domestic gas shortages due to export obligations and a growing population, and the Palestinian Authority. In January 2014, the Leviathan partners entered a USD 1.2 billion deal to sell 4.75 bcm to the Palestine Power Generation Company. In February, the Tamar partners agreed to sell the Jordanian firms Arab Potash and Jordan Bromine 1.8 bcm of natural gas over 15 years for USD 500 million. Furthermore, the partners of the Tamar field signed a letter of intent with Spanish firm Union Fenosa Gas to supply gas to the company’s existing gas liquefaction facilities in Egypt. Israel would not only be selling gas to the Egyptians, but would use their export terminals to reach export markets, such as Europe or Asia where gas prices are higher than the rest of the world. Whilst exporting to immediate neighbours seems a logic and simple endeavour, Israel is unlikely to limit itself to its environs. How Israel would achieve such reach is still a matter of speculation. Because a deal with Woodside is no longer a possibility, the remaining options would be using Cyprus’ projected LNG terminal in Vassilikos, using an FLNG or exporting gas via an undersea pipeline that would connect the Leviathan field to the Turkish coast.Turkish energy companies Turcas Petrol and Zorlu Holding have recently announced that they are considering building a pipeline which may cost $2-$2.5 billion and could supply 7-10 billion cubic meters of gas annually to Turkey via a 500-kilometer undersea route. The prerequisite to such a solution remains the same: a solution to the Cyprus conflict given that such a pipeline would have to cross Cyprus’ exclusive economic zone. Joe Biden’s recent visit to the island created new hopes that the talks would this time progress and potentially reach a settlement. The second necessity is the reestablishment of trust between Israel and Turkey: despite Netanyahu’s apology to the Turks in March 2013 over the Mavi Marmara flotilla incident and the restoration of their diplomatic ties, to date, their relationship remains fragile. Karen Ayat is an analyst focused on energy geopolitics. Email Karen on [email protected] Follow her on Twitter: @karenayat
While the Kremlin announced it would require Ukraine to pay in advance for gas starting from June, European gas companies have been trying to tap into existing opportunities through M&A operations. British shale gas and Nordic LNG industries have been the two main examples of this trend during the 19th week of the year. UKRAINE – RUSSIA Over the last few days, Russia’s worse threat turned almost real. Energy Minister Alexander Novak said on Thursday that Kiev did not live up to its obligations and therefore it will have to pay in advance for its gas supplies. "According to contract... failure of obligations automatically leads to a switch to prepayment for gas deliveries for Ukraine starting from June 1," Novak said in a note, stating that Ukraine’s total debt reached $3.51 billion. Novak’s declarations followed a note released by Gazprom on Wednesday, claiming that Ukraine did not pay for its gas. In this context, moving closer to Europe and storing as much gas as possible are the two cards left in Kiev’s hands. Coherently, on Monday, Ukraine’s Naftogaz joined GSE AGSI+ platform, hinting at a progressive integration of Ukraine into Europe. ‘Gas Storage Europe (GSE) is proud to inform that the GSE Transparency Platform (AGSI+) has been extended to include storage data for Naftogaz of Ukraine. With the data from Naftogaz AGSI+ for the first time expands its coverage beyond EU 28,’ reads a note released on Monday. A few hours later, Ukrtransgaz released data suggesting that the country increased by 77% its April imports with respect to the same period of 2013. The country imported 2.6 billion cubic meters. In this sense, the game is coming to a new round of actions and reactions. Kiev is doing what it can to minimize the consequences of eventual disruptions through a mix of increased imports and progressive integration into the European area, while Moscow is playing its diplomatic game more attentively than before. In the attempt to polish its image, the Kremlin will limit military intervention, but it is logical that it will step up efforts to cement its role in Ukraine’s economy. SHALE GAS: BRITAIN AND POLAND According to recurring rumours, the United Kingdom is about to launch an onshore licensing round. That will clearly catalyse interests, but it will also require large funding and a coordinated response from the industry. It comes as no surprise that IGas Energy is trying to capitalize on this renewed interest for unconventional hydrocarbon in the country, moving closer to the acquisition of Dart Energy. ‘This transaction puts IGas at the heart of unlocking Britain’s energy potential. It demonstrates our commitment to, and confidence in, the UK onshore oil and gas sector. This is a British success story establishing IGas as a key contributor to UK energy mix and security. The transaction further strengthens our position financially, operationally and also significantly increases our licenced acreage as we seek to unlock the untapped energy resource that exists in Britain,’ IGas' CEO Andrew Austin commented in the note released on Friday. The two companies reached agreement on the terms of a recommended acquisition by IGAs of Dart. The estimated value of the total share capital of Dart is A$211.5 million. This financial and economic frenzy corresponds to an increased political attention. The British House of Lords did indeed publish a report about shale gas, recommending Prime Minister David Cameron to take an active role. ‘The Government should take the lead in setting out the economic benefits of shale and in reassuring the public that with proper regulation environmental and health risks of developing it are low,’ reads the note released on Thursday. If the UK is getting ready to promote shale gas exploration, Poland is moving forward with its program. The two countries are clearly on the forefront of European shale gas developments, with Warsaw leading the dance. Despite the confusion, the Eastern European country is indeed registering some (mostly minor) achievements on a weekly basis, also in the last days. On Monday, Polskie Górnictwo Naftowe i Gazownictwo commenced the drilling of the exploratory Tępcz-1 vertical borehole. The Polish company’s intention to investigate the hydrocarbon potential of shale deposits is crystal clear. ‘This is the second borehole to be drilled in the district of Luzino. The previous one, Kochanowo-1, was drilled in May and June 2013 down to a depth of 3,275 metres. The sampled core is currently undergoing testing and analysis to identify the presence and saturation of hydrocarbon deposits,’ reads a note. LNG: THE SECOND LONG-TERM WINNER As many other companies, Finland-based Gasum sees a consistent growth of the LNG market. Coherently, it acquired 51% of the LNG distribution business of Norway’s Skangass from the Lyse Group. ‘The Skangass acquisition supports our strategy and the Finnish Government’s goal of speeding up the construction of LNG infrastructure to ensure the availability and distribution of LNG for maritime transport and industry,’ Gasum’s Chief Executive Officer Johanna Lamminen said in a note released on Monday. At the same time, in the opposite side of Europe, other companies eyes opportunities in the LNG market. Noble Energy and Union Fenosa Gas (UFG) executed a non-binding Letter of Intent (LOI) for the supply of natural gas from offshore Israel to UFG's existing natural gas liquefaction facilities in Egypt. ‘The LOI contemplates a contract term of 15 years and a total gross sales quantity of up to 2.5 trillion cubic feet (Tcf) of natural gas, or approximately 440 million cubic feet per day over the period,’ reads a note released on Monday. According to Noble Energy, the price will be in line with the one defined in other natural gas purchase agreements for regional export sales from Israel. It is expected to be mainly based on Brent oil prices. In this sense, LNG and shale gas have been confirmed as the major early winners of the standoff over Ukraine. In the long term, these options will benefit from eventual tensions between Russia and Europe. What remains to be seen is the role of gas in the long-term. Will European governments try to find a new balance, moving away from their ideological positions? Will they give up with their green intentions? WHAT ABOUT THE FUTURE? Germany’s RWE’s decisions probably provide a good preview of what is about to come. The Essen-based utility, which claims to be one of the main partners for sustainable transformation of the European energy system, does not have any intention to walk away from gas opportunities. An example of this came on Tuesday, when RWE Dea and the State Oil Company of the Azerbaijan Republic (SOCAR) signed a Joint Study Agreement for a joint evaluation of the hydrocarbon prospectivity in shallow waters in an area south of Baku in the Caspian Sea. In this sense, it is not yet the time for open-face playing and it is difficult to predict what’s coming next. Countries, governments and industries are navigating in seas of uncertainty. Nobody can effectively plan rational financial decisions. However, RWE’s investments indicate that gas is likely to remain central for European energy security. It might sound absurd, but the on-going standoff could result in an extremely effective wake-up call. Industry’s prospects are not rosy, as the competition from coal in the short-term and from nuclear in the long-term could have a negative impact, but the standoff over Ukraine could push European government to consider alternative ways to get gas. Investments, subsidies and onshore licencing rounds are more than likely. Sergio Matalucci
The partners in Israel's Tamar natural gas field said on Tuesday they had signed a letter of intent with Union Fenosa Gas to export up to 2.5 trillion cubic feet (tcf) of gas over 15 years to a liquefied natural gas (LNG) plant in Egypt. Tamar was discovered in the eastern Mediterranean in 2009 and holds an estimated 10 tcf of gas. The larger Leviathan field was discovered nearby a year later and turned Israel into a potential energy exporter. Union Fenosa Gas has a stake in an LNG facility in Egypt's Damietta LNG plant. The plant stopped operating last year due to a lack of gas supply since the Egyptian government began keeping its natural gas to meet surging domestic demand rather than sending it to the plant for export. Texas-based Noble Energy, which has a 36 percent stake in Tamar, said both sides hope to finalise a binding agreement within six months, though any deal will require regulatory approvals in Israel and Egypt. MORE
Иерусалим. Товарищество по разработке месторождения «Тамар» (Noble Energy, Делек, Исрамко, Авнер и Дор) подписало предварительное соглашение с испанской компанией Union Fenosa о поставках газа в Египет. Испанцы вместе с итальянской компанией ENI построили завод по сжижению газа в городе ...
Товарищество по разработке израильского газового месторождения Тамар (Noble Energy, Делек, Исрамко, Авнер и Дор) подписало предварительное соглашение с испанской компанией Union Fenosa о поставках газа в Египет. Испанцы вместе с итальянской компанией ENI построили завод по сжижению газа в городе Порт-Саид. Подробнее читайте на нашем сайте www.oilru.com
Spain’s Repsol is “seriously thinking about” a possible sale of its $6 billion stake in utility Gas Natural Fenosa, while signing two agreements with the same company to secure supply of liquefied natural gas for 20 years. Repsol Chief Financial Officer Miguel Martinez said that the Spanish company could further rebalance its portfolio after the deal with Royal Dutch Shell agreed in February. The $6.7 billion transaction included LNG assets based in Bay of Biscay, Trinidad and Tobago, and Peru. “We are not in a hurry, but it is true, that is something we have to seriously think about,” said Martinez on Friday, referring to the sale of its stake in Gas Natural Fenosa. Repsol holds 30% of Gas Natural Fenosa’s share capital at 31 December 2012. Also on Friday, Repsol signed two contracts with Gas Natural Fenosa. ‘Gas Natural Fenosa and Repsol have signed two medium- and long-term gas supply agreement,’ reads a note released on Friday. According to the press release, Repsol will acquire 1 billion cubic metres a year of liquefied natural gas for a period of 20 years and 2 billion cubic metres of gas a year between 2015 and 2018. Repsol's Second Quarter Repsol beat forecasts for the first half of the year in the wake of good results in Brazil and Russia, reads a note released by the company on Thursday. ‘Net income during the first half of 2013 rose 2.6% to €1.054 billion. The increase is especially significant as the year-earlier period included earnings from YPF,’ reads the note referring to Yacimientos Petrolìferos Fiscales, a vertically integrated Argentine energy company, whose renationalization was initiated in 2012 by President Cristina Fernàndez de Kirchner. Results beat all the forecasts of the most important polls, both in terms of net profit and EBITA. ‘The Upstream unit consolidates the trend of earlier quarters, posting operating profit of 1.161 billion euros due to increased output,’ explains the company, adding that also the Downstream unit’s operating income increased (by 9.9% to €311 million). ‘The improved results are based on a strong performance from all of the company’s business units. Net income from continuer operations rose 4.7% to €945 million,’ adds the note. The company also surpassed its 2012-2016 divestment goals at the end of February following the agreement to sell to Shell LNG assets for $6.653 billion. ‘The transaction is expected be complete in the fourth quarter of the year,’ underlines the company. On the other hand, the operating income of Gas Natural Fenosa was €464 million in the first half of 2013, a fall of 2.3% ‘as higher wholesale gas sales margin were unable to make up for the lower contribution from Union Fenosa Gas and lower earnings of the electricity business in Spain due to the new tax regime.’ Gas Natural Fenosa said this week that it intends to rebalance its portfolio, increasing its activities abroad to compensate for weakness at home in the wake of recession and recent overhaul of the Spanish energy sector. Gas Natural Fenosa is not ruling out the possibility of legal actions over the measures. Earlier this month, Rajoy’s government announced it would introduce measures to reduce the gap between regulated power prices and generation costs. The Spanish government will promote price rises (3.2% in electricity bills for consumers) and cost savings measures, such as a cut in the fees charged by companies distributing and transporting electricity. The government will also scrap subsidies to renewable power producers.
Spain’s Repsol beat forecasts for the first half of the year in the wake of good results in Brazil and Russia, reads a note released by the company on Thursday. ‘Net income during the first half of 2013 rose 2.6% to 1.054 billion euros. The increase is especially significant as the year-earlier period included earnings from YPF,’ reads the note referring to Yacimientos Petrolìferos Fiscales, a vertically integrated Argentine energy company, whose renationalization was initiated in 2012 by President Cristina Fernàndez de Kirchner. Results beat all the forecasts of the most important polls, both in terms of net profit and EBITA. ‘The Upstream unit consolidates the trend of earlier quarters, posting operating profit of 1.161 billion euros due to increased output,’ explains the company, adding that also the Downstream unit’s operating income increased (by 9.9% to 311 million euros). ‘The improved results are based on a strong performance from all of the company’s business units. Net income from continuer operations rose 4.7% to 945 million euros,’ adds the note. The company also surpassed its 2012-2016 divestment goals at the end of February following the agreement to sell to Shell LNG assets for $6.653 billion. ‘The transaction is expected be complete in the fourth quarter of the year,’ underlines the company. On the other hand, the operating income of Gas Natural Fenosa was 464 million euros in the first half of 2013, a fall of 2.3% ‘as higher wholesale gas sales margin were unable to make up for the lower contribution from Union Fenosa Gas and lower earnings of the electricity business in Spain due to the new tax regime.’ Gas Natural Fenosa said this week that it intends to rebalance its portfolio, increasing its activities abroad to compensate for weakness at home in the wake of recession and recent overhaul of the Spanish energy sector. Gas Natural Fenosa is not ruling out the possibility of legal actions over the measures. Earlier this month, Rajoy’s government announced it would introduce measures to reduce the gap between regulated power prices and generation costs. The Spanish government will promote price rises (3.2% in electricity bills for consumers) and cost savings measures, such as a cut in the fees charged by companies distributing and transporting electricity. The government will also scrap subsidies to renewable power producers.
Молдавия договорилась с РФ и Украиной продлить на год контракты на поставку электроэнергии и сохранение ее цены
Молдавия договорилась с энергетическими компаниями Российской Федерации и Украины о продлении еще на один год контрактов на поставку электрической энергии потребителям республики и сохранении ее цены на прежнем уровне - 6,9 цента за 1 кВт/ч. Об этом на пресс-конференции в Кишиневе сообщил исполняющий обязанности вице-премьера, министра экономики Молдавии Валерий Лазэр. Он отметил, что, в частности, испанская компания RED Union Fenosa, обеспечивающая электроэнергией потребителей из центральных и южных районов Молдавии, продлит на год контракт с Молдавской ГРЭС, расположенной в Приднестровском регионе и принадлежащей российской компании Интер РАО ЕЭС . В то же время молдавская компания Energocom, отвечающая за поставки электроэнергии для нужд принадлежащих государству Северных и Северо-Западных электрораспределительных сетей Молдавии, подпишет контракт с украинской компанией ДТЭК Востокэнерго , входящей в ДТЭК - крупнейшую частную энергетическую компанию Украины. Подробнее читайте на нашем сайте www.oilru.com