Tuesday, June 23, 2015

Turkey threatens the major prospects for Eastern Med gas supply | IAGS Journal of Energy Security

Turkey threatens the major prospects for Eastern Med gas supply

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As Europe seeks to diversify its sources of natural gas as an alternative to the politically sensitive Russian supply, a massive off-shore gas source in the Mediterranean is ready for exploration and drilling. There are game-changing stakes at play.
Unfortunately, the Turkish leadership has threatened to use force to stop this from happening.
Last October, Turkey sent the BARBAROS, its geophysics exploration ship, accompanied by naval vessels, into the Cypriot Exclusive Economic Zone waters. In November 2014, Turkish naval commander Admiral Bülent Bostanoğlu threatened the use of force against Greece, while speaking on board a Turkish naval corvette in Greek waters.
This is not the first time Turkey has caused such disruptions: In February 2014 the Turkish military declared that the Norwegian ship, M/V Princess, was conducting geological surveys in the southern part of Cypriot territorial waters. The Norwegian seismic exploration vessel was then chased out by a Turkish warship, the TCG Giresun F-491, which forced the Norwegian geophysics ship to leave the Turkish-controlled zone. 
The Norwegian ship was operating on behalf of Cyprus in its search for oil and gas in the Eastern Mediterranean. However, Turkey does not recognize Cyprus as a sovereign country and is attempting to block Cypriot oil and gas exploration, claiming the share of Turkish Cypriots in any hydrocarbon wealth. Ankara absurdly claims that energy developments off-shore of Cyprus are undermining the peace negotiations.
Campaigning for the 2015 June elections, Turkish President Recep Tayyip Erdogan called for Moslems to “liberate” Jerusalem – and Spain. Ankara is signalling that instead of playing a win-win game, it would rather play a lose-lose one.
Until recently, the lack of natural resources effectively excluded Israel and Cyprus from being significant energy players. However, with the discovery of the Leviathan natural gas field off the coast of Israel, which boasts recoverable reserves of 17 trillion cubic feet of gas and 1.6 billion barrels of oil, and the Cypriot Aphrodite gas field, that boasts estimated reserves of 7 trillion cubic feet, things have changed.
Development of the Leviathan and Aphrodite natural gas fields is a potential game-changer for the Eastern Mediterranean – and for Europe. These vast reserves are sufficient to supply Europe with 10 billion cubic meters (bcm) of natural gas a year, for 30 years. When added to the Caspian and Kurdish reserves, they may be able to alleviate Europe’s dependence on Russian gas.
Off-shore gas in the Eastern Med could also become a catalyst for peace, as Egypt and Jordan are highly interested in importing gas from the region, while Gaza, Lebanon and Syria are likely to have additional reserves for production and export.
The EU has publicly recognized that in order to ensure energy security and reach its climate change goals, it must engage with its neighbors to establish a diverse range of energy sources and supply routes. The Eastern Mediterranean could play a vital role in reaching these goals by supplying a portion of the additional 100 bcm of natural gas a year that will be needed in Europe over the next 15 years.
The real question is how to get the gas out. If an East Med gas pipeline is built from the off-shore gas fields through Cyprus and via Turkey, then the Eastern Med may become a serious gas supplier for Europe.
The proposed East Med pipeline would bring gas from off-shore Israel and Cyprus to the EU through Greece or Turkey. So far though, Turkey is blocking a shorter and cheaper pipeline through occupied Northern Cyprus and Turkey proper, which would be the optimal solution.
Energy cooperation between Cyprus, Israel and Egypt is a crucial piece of the Eastern Med puzzle. Turkey has no business disrupting it. The two producing countries will require the creation of a gas pipeline to Europe or a liquefied natural gas terminal.
Israel and Cyprus are also conducting talks with Jordan and Egypt to purchase their gas. Israel inked deals with both Amman and Cairo – from the Tamar field owned by the Texas-based Noble Energy and the Delek Group of Israel, to Egypt’s Dolphinus Group, and from the Leviathan field to the British Gas facilities in Egypt. Tel Aviv’s stock market, buoyed by the expectation of a successful conclusion to these gas deals, jumped by over seven percent at the news of Netanyahu’s victory in March.
The offshore East Med development would bring strategic and economic benefits, including budget revenue, hosting international companies, and job creation, as well as developing much needed infrastructure and expertise.
Given Ankara’s good will, Eastern Med gas projects may also be helpful in terms of resolving long lasting tensions between Cyprus and Turkey, and between Israel and the Palestinians. In addition, if the parties build a natural gas pipeline from the Israeli and Cypriot fields to Turkey, Ankara would receive massive gas transit tariffs. However, the win-win project will not be realized without President Erdogan’s blessing, and such cooperation is unlikely without close engagement by the US and EU with Ankara.
Ariel Cohen, PhD, is Founding Principal, International Market Analysis Ltd, and Director of the Centre for Energy, Natural Resources and Geopolitics at the Institute for the Analysis of Global Security. He is also a Senior Fellow at the Atlantic Council. He can be reached at: arielcohen@comcast.net and www.arielcohen.com

Source: http://www.ensec.org/index.php?option=com_content&view=article&id=579:turkey-threatens-the-major-prospects-for-eastern-med-gas-supply&catid=146:cenrg&Itemid=439

CYPRUS AND ISRAEL PLEDGE LONG TERM ENERGY COOPERATION | Natural Gas Europe


June 23rd, 2015
CYPRUS AND ISRAEL PLEDGE LONG TERM ENERGY COOPERATION
A delegation headed by President Nicos Anastasiades visited Israel last week to meet with Israeli Prime Minister Benjamin Netanyahu and high ranking officials from the Israeli government. Ministers of energy of Cyprus and Israel, Yiorgos Lakkotrypis and Yuval Steinitz initiated a dialogue for the purpose of reinforcing energy ties between the two Eastern Mediterranean countries. The two ministers discussed the importance of concluding a unitization agreement on the joint exploitation of cross-border gas reserves and the plan to sell gas-powered electricity from Israel to Europe via Cyprus and Greece. 
Cyprus and Israel have made significant discoveries off their shores and are engaged in talks to export gas to their immediate neighbours. The two countries share the same aspiration to sell natural gas to energy-thirsty Egypt undergoing a severe energy crisis and in desperate need for cheap natural gas. Lakkotrypis and Steinitz discussed the possibility of merging pipelines from Israel and Cyprus to deliver gas to Egypt. The Cypriots turned to their Israeli neighbors in the past to propose the construction of a joint LNG facility on the Vassilikos coast of the island, a proposition rejected by Israel at the time. Since then, Cyprus has moved away from its original plan to build an LNG facility for not having encountered sufficient amounts of natural gas to justify to commercial viability of the multi-billion dollar endeavour. 
The two sides were in favour of increasing cooperation in the field of energy as they discussed ways of optimizing their natural gas resources in a climate described as very favorable to constructive dialogue. The Cypriots and Israeli delegations also examined the EurAsia Interconnector that would connect the electricity grids of Israel, Cyprus and Greece to sell gas-powered electricity to Europe via submarine cable.
In Israel, the pending dispute between the partners in the Leviathan and Tamar fields, and the Antitrust Authority is threatening to endanger regional gas deals, with Egypt and Jordan. An agreement with the companies controlling Israel’s largest gas fields will be presented by the regulators to the cabinet next week as reported in Israeli financial daily Globes. The approval of the proposal will be key in ensuring the timely development of the Leviathan and Israel’s timely entry into the regional market.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Karen is also a co-founder of the Lebanese Oil and Gas Initiative (LOGI). 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 

Source: http://www.naturalgaseurope.com/cyprus-and-israel-pledge-long-term-energy-cooperation-24311

Monday, June 22, 2015

Israel's Leviathan gas output delayed two years to 2020 | Platts

Israel's Leviathan gas output delayed two years to 2020

Jerusalem (Platts)--22Jun2015/743 am EDT/1143 GMT

Gas production at the Leviathan field offshore Israel is now expected to start in 2020, delayed from the latest estimate of early 2018, energy industry sources said Sunday.

They said the revised timetable will be part of a compromise framework for the gas sector that the Israeli government is due to approve later this month.

Before a regulatory impasse in Israel's gas sector, the Leviathan consortium -- Noble Energy, Delek Drilling, Avner Oil and Gas and Ratio Oil Exploration -- had expected to begin production in early 2018.

The companies said in negotiations with the government in recent weeks that they would not be able to make that target, the industry sources said.
The government is expected to approve increased gas exports from the Tamar field, currently the sole source of supply for the domestic market, the same sources said.

In 2013, the Israeli government approved limited exports of gas from the Tamar field but only after the Leviathan field began commercial production.

Under the proposed new framework, the sources said that gas could be exported from Tamar before Leviathan comes online.

Earlier this month, Israeli Prime Minister Benjamin Netanyahu instructed senior government officials to finalize a compromise agreement with gas exploration companies within a month.

The government's security cabinet is due to discuss a comprise formula by the end of the month.

Netanyahu has argued that approval of the compromise is crucial for Israel's foreign relations, citing specifically Egypt and Jordan. Companies from both countries have signed letters of intent to buy Leviathan gas.

The proposed compromise deal recommends granting Delek Group more time to sell its stake in the Tamar field and sell off its holdings in the Tanin and Karish licenses. Delek would be left with its Leviathan stake.

The proposal would require Noble Energy to cut its Tamar ownership to 25%, from 36% currently, and sell its entire holdings in the Karish and Tanin licenses.

--Neal Sandler, newsdesk@platts.com
--Edited by Meghan Gordon, meghan.gordon@platts.com

Source: http://www.platts.com/latest-news/natural-gas/jerusalem/israels-leviathan-gas-output-delayed-two-years-26127795