The Great Israel Gas Export Drive Gets Underway
The investor group responsible for the discovery of huge commercial quantities of natural gas off Israel’s coast is now reported to be in talks in several fields to discuss future export possibilities.
The Natural Gas Production Platform in Israel seashore / Getty
/ By Yoel Bermant /
According to Israeli government sources, the principal gas drilling projects are moving ahead according to schedule, and it appears there is no reason for a let up in the optimism that the discovery will have long-term and profound effect on Israel’s financial status.
After some considerable debate regarding the ratio of export capabilities offset against domestic use the partners in the project have now been given the green light to discuss export possibilities, and wasted no time in getting the ball rolling.
According to a spokesperson for the Delek Group, the parent company behind the project and the principal partners Noble Energy, are already in advanced stages of concussions with commercial companies based in Jordan, Egypt and the Palestinian Authority regarding the possible purchase of Israeli gas.
More significantly it is also been reported that the group were also in the early stage of negotiations with commercial interests within Turkey regarding the possibility of exporting the vast quantities of gas that will soon be flowing from the fields in the Mediterranean into mainland Europe. In order to make this happen, the gas would need to flow through a specially constructed pipeline that will pass through their country.
Turkey’s tacit agreement to enter into discussions is further indication that the political tension which has been ongoing between the two countries for the past three years is beginning to ebb, possibly in the light of the vast profits that can both the countries could determine if the gas line project does become a reality.
According to a recent U.S. sponsored Geological Survey, the quantities of financially viable recoverable gas estimated to be in situated within the Levant Basin, lying largely in Israeli and Cypriot waters in the eastern part of the Mediterranean, holds the staggering figure of 3.5 trillion cubic meters of gas.
This is solidly proved to be 100% accurate, this quantity of gas would be sufficient to meet the entire needs of all of Europe for natural gas. Translated into financial terms, even if Israel and Cyprus together export just two trillion cubic meters of the natural gas expected to be drawn from these fields, it could run into an income amounting tohundreds of billions of dollars.
While discussions with the Turkish commercial interests appear to be going well, no one either side of the discussions can allow themselves to become overly optimistic, as there will be a number of political disputes to be settled [or at least put on hold] until pen can be put to paper. Irrespective of the tension between Israel and Turkey, there’s also a longer running territorial dispute between Cyprus and Turkey that may yet put a block on any pipeline route to Turkey.
And that’s before the Russian’s, who are at present the leading natural gas exporters into Europe have their say.
In the event that Israel and Cyprus are limited in their ability to export through Turkey to Europe, it will mean that the two largest offshore fields in the wall discovered over the past 10 years may have trouble in finding export markets. The current producing field, Tamar, with an estimated 280 billion cubic meters, that was discovered in 2009, is already supplying Israel with natural gas. The considerably larger Leviathan field discovered the following year is estimated to hold around 530 billion cubic meters in the estimated to come online between 2016 or 2017.
The spokesperson for Derek also intimated that the company were investigating the possibility of exporting gas in liquid natural format (LNG) to Asia. While the shipping process would be considerably more expensive and complicated, this would soon be offset by the prices that the Asians would be prepared to pay for regular flows of natural gas.
Waiting in the wings for such a deal to come through is Australia’s Woodside Petroleum who has agreed in principle to take a 30% share in the Leviathan field for around $1.25 billion. If Israel should decide, and if it becomes possible, to take the shuttle route through Turkey to Europe, then the chances are that the deal with Woodside would become null and void.
Read more about: Australia, Cyprus, Delek, Egypt, Israel, Levant Basin, Leviathan, Liquid Natural Gas, Mediterranean, Natural Gas, Noble Energy, Palestine Authorities, Russia, Tamar, Turkey, Woodside Petroleum