Friday, October 24, 2014

BG seeks revival of Egypt LNG business with BP deal | Reuters

BG seeks revival of Egypt LNG business with BP deal

Thu Oct 23, 2014 
* BG hopes a deal could lift Egypt operations in 2015/16
* Talks going ahead with Israel, Cyprus for gas
* BG taps rival to boost exports from Ikdu LNG plant-sources
* BP may pump 350 mcf/day from neighbouring licence-sources

By Oleg Vukmanovic and Ron Bousso
MILAN/LONDON, Oct 23 (Reuters) - British energy company BG Group is in talks with BP to link their two gas developments off Egypt's coast, as part of BG's drive to breathe life into its gas-starved export plant, sources familiar with the matter said.
The future of BG's Idku liquefied natural gas (LNG) plant near Alexandria has been in doubt in recent years due to falling production and rising demand in the local Egyptian market which has led to the suspension of exports from the plant.
BG is in advanced talks with Israel to import gas supplies into Egypt and this week began similar discussions with Cyprus aimed at restoring output.
Finding new sources of gas to supply the plant has become a top priority for BG, which issued a profit warning earlier this year due to production cutbacks in Egypt, accounting for around one fifth of its global gas production.
The company has recently engaged in talks to connect infrastructure at its West Delta Deep Marine (WDDM) gas field to BP's nearby North Alexandria licence, that would then be channeled into the LNG export plant.
Under the plan, BP would route around 350 million cubic feet (mcf) of gas a day from two undeveloped fields called Libra and Taurus into BG's under-used WDDM offshore pipeline network, the sources told Reuters.
From there, the gas would be piped down into the Idku plant for liquefaction and export by ship to Asia and South America, likely boosting revenues for the energy major.
The pricing terms being discussed were not clear, although BP has a deal dating from 2010 to sell gas from North Alexandria to the Egyptian government with a floor price of $3 per million British thermal units (mmBtu) and a ceiling of $4.10/mmBtu, consultants Wood Mackenzie said.
BG hopes the deal would allow it to boost LNG production from Idku in 2015-2016.
A BP spokesman declined to comment, but a source at the company said Egypt's state-run gas company EGAS was involved in discussions.
BG recently upgraded its subsea pipeline as part of a $1.5 billion investment in the West Delta Deep Marine field, allowing it to "manage the production from additional wells simultaneously and provide the capacity for future potential developments," according to a company statement.
Production at BP's massive offshore Mediterranean finds was due to start at the end of 2014, and expected to add some 1 billion cubic feet per day to total output. Delays mean exports are now not expected before 2016.
DIVERSIFICATION
The talks form just one strand of BG's strategy to turn around its once-prized Egyptian operations and lift a major weight suppressing its share price.
In June, BG signed a preliminary agreement with the partners in Israel's giant Leviathan natural gas field to export gas to Idku. In the deal under discussion, Leviathan -- off Israel's Mediterranean coast -- would supply 7 billion cubic metres (bcm) annually for 15 years via an underwater pipeline.
BG also held talks this week with Cyprus Hydrocarbons (CHC) to import gas from Cyprus.
Egypt is facing its worst energy crisis in decades, with declining gas production and high consumption that has turned the country from an energy exporter to a net importer in the past three years.
For two years, Egypt has sought to complete a floating LNG import terminal to allow it to purchase LNG from abroad.

The oil minister said in September that the terminal would be completed by December, but few details have been released. (Editing by Mark Potter)
SOURCE

Tempers flare at House over Halliburton and ‘green’ law | Cyprus Mail

 14 Comments

Tempers flare at House over Halliburton and ‘green’ law

Tempers flare at House over Halliburton and ‘green’ law
By Elias Hazou
FOLLOWING a fiery session of the plenum, the House last night passed a law placing new environmental requirements relating, among others, to the operations of Halliburton in Cyprus.
The legislative proposal – authored by Greens MP George Perdikis – passed with 28 votes for (AKEL, DIKO, EDEK and the Greens), while DISY and DIKO MP Athena Kyriakidou abstained.
The bill stipulates that additional environmental studies must be carried out for certain projects, such as the one Halliburton intends to establish in Aradippou.
But for its ardent supporters – such as Perdikis – the law may have come too late. That’s because Aradippou’s municipal council had apparently approved the town-planning permit for Halliburton’ facilities two days earlier, meaning that the new law passed does not apply to its operations. It’s understood Halliburton had applied for the permit several weeks ago.
Ruling DISY holds a majority in the Aradippou municipal council, and at the House, opposition parties accused the ruling party of wielding its influence to nudge the municipality into okaying the town-planning permit on the sly while a new environmental bill was pending before parliament.
The Department of the Environment had already compiled a draft bill with extra regulations, and lawmakers were expecting the government’s item to be submitted. The government got an extension on the understanding that meantime no action would be taken by Aradippou municipality.
The Greens’ Perdikis meanwhile took the department’s draft bill, adapted it and formulated his own legislative proposal.
Amid recriminations on the House floor, tempers flared with DISY leader Averof Neophytou exclaiming: “Would you like them [Halliburton] to pack up and set up shop in Lebanon instead?”
“You can’t change the rules of the game midway, otherwise what foreign company will do business here,” sources close to DISY later told the Mail, arguing that had Perdikis had his way the Halliburton investment might have been scuppered.
One of the world’s largest oilfield services companies, Halliburton intends to set up its base of operations for the east Mediterranean in Cyprus. They provide drilling services and gear for companies prospecting for hydrocarbons.
It’s understood the facilities they intend to build in Aradippou include a factory for the assembly of equipment such as pipelines as well as extensive warehouses, in what will be a multi-million investment.
Previously, an energy analyst had told the Mail that Halliburton expects some 50 new gas wells – worth billions in contracts to them – to be drilled in the eastern Mediterranean in the coming years.




Link to source: http://cyprus-mail.com/2014/10/24/tempers-flare-at-house-over-halliburton-and-green-law/

Thursday, October 23, 2014

Athens weighs its LNG and CNG options | Kathimerini


Athens weighs its LNG and CNG options

By Chryssa Liaggou

Energy Minister Yiannis Maniatis met on Wednesday with officials from six leading shipping companies in the liquefied natural gas (LNG) sector, as he is weighing the possibility of Greece assuming a strategic role in LNG shipping thanks to the opportunities created by the new reserves off Israel and Cyprus and those anticipated in Greece, as well as the general geopolitical developments in the region.

Maniatis called on Greek shippers to contribute toward the safeguarding of the country’s energy supply ahead of a possible crisis in Ukraine by making the most of their ability to quickly find spot loads on the international market.

The meeting also dealt with the possibility of the involvement of Greek shipping in the carriage of compressed natural gas (CNG) in the broader market of the Southeastern Mediterranean.

That would mean the building of CNG ships by Greek companies, which in turn would depend on the securing of a long-term contract with a gas supplier, as such vessels cannot carry any other commodities. Maniatis reportedly told the shippers that the country is able to secure such contracts, but without presenting a ready plan.
ekathimerini.com , Wednesday October 22, 2014 (22:39)  



Link to source: http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_22/10/2014_543983

Tuesday, October 21, 2014

Commercially Sensible, Politically Sensitive | Natural Gas Europe

October 21st, 2014
Commercially Sensible, Politically Sensitive
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 inglobal 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 Karen karen@minoils.com Follow her on Twitter: @karenayat


Link to source: http://www.naturalgaseurope.com/commercially-sensible-politically-sensitive

Monday, October 20, 2014

Cyprus Hydrocarbons Company in talks with BG Egypt | Phileleptheros


Cyprus Hydrocarbons Company in talks with BG Egypt
Published on: Mon, 20 Oct 2014 18:02:10 GMT

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One of the major gas producers in Egypt, BG Egypt, held an introductory meeting on Monday with Cyprus Hydrocarbons Company (CHC) to discuss the possible export of Cyprus’ natural gas to the company’s infrastructure in Egypt.

Speaking after the meeting with the British-Egyptian company which lasted more than two hours, the CHC president Toula Onoufriou stressed the importance of the meeting.

"This meeting is a milestone, marking the beginning of a series of initiatives of the CHC aiming to create better conditions for the disposal of Cyprus gas, so when conditions are mature enough, which is expected in the coming months, to have before us the best possible options," said  Onoufriou.

Contacts with BG Egypt would continue with the aim to further elaborate on the issue, by examining more specifically the technical, economic, legal and geopolitical aspects, so that they could conclude on a framework of alternative scenarios for a possible sale agreement, she added.

During the last seven months the CHC has had a series of contacts with international companies to create, according to its President “the best conditions and options for the promotion and sale of hydrocarbons belonging to the Republic of Cyprus.”

The meeting with BG Egypt is also part of a regional cooperation between Cyprus and countries in the region, particularly Egypt. Greece, Egypt and Cyprus had already expressed their commitment to work closely and strengthen their cooperation in areas of mutual benefit, including energy. On November 8, the leaders of the three countries will have a meeting in Cairo.

At the same time, the CHC is holding contacts with other international companies that have shown interest in the natural gas of Cyprus, in order to maximise options.

Monday’s meeting in Nicosia was attended by President of BG Egypt Arshad Sufi, Vice President Mahmoud El Tabie and Vice President John Burley.

As Sufi stated after the meeting, BG Egypt is one of the major gas producers in the country for 25 years.
“We operate a lot of the infrastructure related to gas and we are here for an introductory meeting to discuss the possibilities for the gas over here. And we hope to continue the dialogue as we look forward to explore the opportunities”, he said.

He added that Egypt is a big market for natural gas so “we are looking of the opportunities around to see what sort of volumes can come into the country because we have a lot of infrastructure that can be utilized.”

In that introductory meeting, he said, the company was just exploring to see how much gas could be made available and if it worked, to see how they might utilize it.

Consortium ENI/KOGAS has been awarded exploration licences in Cyprus’ EEZ, namely in Blocks 2,3 and 9. ENI has completed two seismic surveys, and is planning to drill six wells in the coming 18 months.
Exploration and appraisal drilling in Block 12 of Cyprus’ EEZ by Noble Energy & Delek has shown estimated reserves of 3.6 Tcf to 6 Tcf, namely 5 Tcf. Further exploration is planned by the consortium.
- See more at: http://incyprus.philenews.com/en-gb/financial-news/4434/41814/cyprus-hydrocarbons-company-in-talks-with-bg-egypt#sthash.0Uau4mlW.E1PSwPLk.dpuf


Link to source: http://incyprus.philenews.com/en-gb/financial-news/4434/41814/cyprus-hydrocarbons-company-in-talks-with-bg-egypt