The future of global gas demand - CYPRUS MAIL

September 6, 20202

Charles Ellinas

The future of global gas demand was the subject of the Global Gas Report 2020 (GGR) published last month by the International Gas Union (IGU), in collaboration with Bloomberg NEF (BNEF) and Italian gas company Snam.

In addition to reviewing 2019 performance, the report assesses the effect of Covid-19 on the gas industry in the first half of 2020 and analyses the drivers for recovery in the next few years. It also includes a special section on the role of hydrogen and the gas industry in the low-carbon transition, particularly on market potential and technological options and costs of hydrogen production, storage and transport.

Its main conclusion is that the disruption caused by Covid-19 is on the way to reduce gas consumption and LNG trade by 4% in 2020. This and abundant supply of gas have kept prices at historic lows.

But on the positive side, GGR points out that “abundant supply and continued cost-competitiveness, aided by a push for cleaner air, can lead to a recovery in demand to pre-Covid-19 levels in the next two years, as the global economy regains momentum.”

OCI NV, Adnoc could shutter fertilizer plants on high gas prices - ENTERPRISE

Tuesday, 14 July 2020

OCI NV, Adnoc could shutter Egypt fertilizer plants due to gas prices: High gas prices in Egypt could force OCI NV and the Abu Dhabi National Oil Company (Adnoc) to close all of their fertilizer plants in the country, the companies warned yesterday, according to Youm7. The companies, which last year merged to create the region’s largest fertilizer producer, said that they would first reduce production in response to the country’s high gas prices, which they said were inflicting heavy losses on their operations. The factories will eventually have to close entirely if gas prices remain high, the group said, without clarifying whether any closures would be permanent. Industrial firms currently pay USD 4.5 per mmBtu for gas in Egypt, more than 2.5x the international price paid by foreign competitors.

Record Egyptian finds but gas glut beckons - CYPRUS MAIL

March 1, 2020

Charles Ellinas

Egypt had another successful year in 2019 and this was showcased at the country’s annual petroleum show, EGYPS-2020, held mid-February in Cairo.

But 2020 is turning out to be a pivotal, but challenging, year for the oil and natural gas industries worldwide and Egypt and the East Med are not immune to it.

Opening the conference, Petroleum Minister Tarek El Molla highlighted the successes of 2019, with the oil and gas sector contributing 25 per cent to Egypt’s gross domestic product.

A total of 29 international agreements were signed during EGYPS-2020, reflecting the great potential and promising opportunities of the Egyptian petroleum sector.

Egypt officially became a net exporter of LNG last year, bringing our gas hub ambitions ever closer - ENTERPRISE

Sunday, 16 February 2020

Egypt officially became a net exporter of LNG last year, bringing our gas hub ambitions ever closer: Egypt’s imports of liquefied natural gas (LNG) fell to zero in 2019 and exported USD 1.24 bn-worth of LNG, marking a nearly 150% y-o-y increase, according to Capmas figures released on Thursday. Oil Minister Tarek El Molla had been saying since 2018 that Egypt’s LNG imports would come to an end as of October of that year, and that Egypt would begin exports by January 2019 as more output from gas fields is connected to the national grid. Crude oil and butane gas imports also dropped last year, while exports of petroleum products rose 4.5% y-o-y to reach USD 4.9 mn.

EGAS scraps plan to increase domestic natgas production to 8 bcf this fiscal year - ENTERPRISE

Thursday, 6 February 2020

EGAS’ plan to increase domestic production of natural gas to 8 bcf/d in FY2019/2020 has been hindered by the global decline in the price of natural gas and the abundant supply for local consumption, sources from EGAS told Al Mal. 

The sources said that the inability to implement the plan is not due to technical, production or investment problems, but is linked to global and local changes. 

Global gas prices averaged USD 2.57/mmBtu last year, down from USD 3.15 over the past four years, and fell below USD 2 at the end of January.

Gloomy outlook: Aphrodite moves to exploitation - CYPRUS MAIL

Noble’s senior VP K. Elliot (L), Energy Minister G. Lakkotrypis

November 17, 2019
Charles Ellinas

The granting by the government last week of the Aphrodite gas-field Exploitation Licence for 25 years to the Noble Energy, Delek and Shell consortium is a milestone in the development of hydrocarbons discovered in the Cyprus EEZ. Not only it is the first such licence, but it enables the consortium to enter negotiations with Egypt’s Idku LNG plant to secure a gas sales contract for this gas.

Understandably, this generated considerable euphoria even to the extent of talking about the immense profits to Cyprus, estimated to be $9.3billion over the life of such a contract – based on an oil price of $70/barrel.

But let’s try to put this in context. First, the application by the consortium for an Exploitation Licence is a contractual requirement – otherwise it might have to relinquish the gas field. It does not mean that it will immediately proceed with development and production. This requires the successful completion of a number of important steps: Design of all required facilities to get a better handle over costs; Drilling at least one more appraisal well to estimate more accurately Aphrodite’s gas reserves; negotiations with Idku to secure a gas sales contract; Securing the required investment.

Cheaper Natural Gas From July 1 - NOVINITE

June 28, 2019, Friday // 13:21

Natural gas has been cheaper starting from July 1. This is decided by the Commission for Energy and Water Regulation. The price of the blue fuel will drop by 0.6%.

The gas price approved by the Commission for the third quarter amounts to BGN 44.90 / MWh (excluding access, transmission, excise and VAT), which represents a decrease of 0.27 BGN / MWh or 0.60% compared to the current price for the second quarter of 2019.

At the approved gas price of BGN 44.90 / MWh, the "gas price at the entrance of the gas transmission grid" is included in the amount of BGN 43.97 / MWh, the "public supply" to 0.80 BGN / MWh.

During the approval of the price of natural gas KEVR takes into account the conditions under the current contract between Bulgargaz EAD and OAO Gazprom Export, the changes in the USD exchange rate against the BGN, the calorific value and the quantities of natural gas for the respective quarter.

International hydrocarbons interest in Cyprus confirmed - CYPRUS MAIL

FEBRUARY 24, 2019

The biggest and most important hydrocarbons conference and exhibition in Egypt and the East Med region, EGYPS 2019, took place in Cairo earlier this month, and Cyprus took part with a country pavilion showing the Cyprus Hydrocarbons Company (CHC) and natural gas public company (DEFA) among others.

In a wide-ranging interview about the conference, Egypt’s Petroleum Minister Tarek El Molla spoke about the country’s oil and gas achievements in 2018 and plans for 2019. The great success of 2018 was accelerating natural gas production, with Zohr at the forefront, as a result of which, by the end of the year, domestic gas consumption was exceeded for the first time since 2014. This helped Egypt become self-sufficient, stop LNG imports in October and re-start exports. By January Shell’s Idku LNG plant was exporting 0.52 billion cubic feet per day (bcf/d).

The development of Zohr is reaching its final stage, and is expected to achieve 3.2 bcf/d plateau production by the end of 2019. This will allow the Damietta LNG plant to restart exports later in the year, once outstanding arbitration issues are resolved.

Dana Gas now producing 70,000 barrels of oil per day in Kurdistan - KURDISTAN 24

A gas processing plant run by Dana Gas in the Kurdistan Region

December 15, 2018

John J. Catherine

ERBIL (Kurdistan 24) – The Middle East's largest regional private sector natural gas company has announced that, as a result of a previous ramp-up of production in the Kurdistan Region, it reached 70,000 barrels of oil per day (bpd) in late November and has either sustained or exceeded that amount since then.

"Production in excess of 70,000 barrels oil equivalent per day is a great achievement for Dana Gas," said Chief Executive Officer Patrick Allman-Ward in a statement released on Thursday.

"The increase in production will help offset the lower realised hydrocarbon prices that have impacted the oil industry in the last quarter and support growth in our revenue and net profit figures for the full year 2018 and beyond."

Dana Gas is an independent gas company headquartered in Sharjah, United Arab Emirates that has been active in the Kurdistan Region of Iraq since 2007 when it entered into agreements with the Kurdistan Regional Government (KRG) to develop its substantial gas resources.

UPDATE 2-Turkey's Botas hikes natural gas price for power generation by 50 pct - sources - REUTERS

JULY 31, 2018 / 10:55 PM

Orhan Coskun

• Turkey links gas prices to dollar
• Energy regulation authority hikes electricity prices
• Botas also hikes natural gas prices for residential use (Adds hikes to electricity and natural gas consumer prices)

ANKARA, July 31 (Reuters) - Turkey’s state pipeline operator Botas will hike the price of natural gas used for electricity production by 50 percent as of Wednesday, sources said.

The price hike was “inevitable” due to a weaker lira pushing oil and natural gas prices higher, as Turkey is mostly dependent on energy imports, energy sources told Reuters.

Earlier on Tuesday, the central bank hiked its crude oil price assumption to $73 from $68.

Egypt hikes natural gas prices by up to 75 percent - THE SEATTLE TIMES / AP

July 21, 2018 at 9:41 am

CAIRO (AP) — Egypt raised natural gas prices for households and businesses on Saturday by between 33.3 and 75 percent, the latest among tough austerity measures aimed at rebuilding the country’s economy battered by years of unrest since a 2011 uprising.

The government’s decision, published in the official gazette on Saturday, should come into effect starting August. It sets the price for gas consumption of up to 30 cubic meters to 0.175 Egyptian pounds up from 0.100 pounds per cubic meter, an increase of 75 percent.

Meanwhile, gas consumption between 30-60 cubic meters went up by 42.8 percent, from 0.175 Egyptian pounds to 0.250 pounds per cubic meter. Consumption of over 60 cubic meters was upped by 33.3 percent, from 0.225 pounds to 0.300 pounds per cubic meter.

The move is likely to further fan the flames of popular discontent, especially among poor and middle-class Egyptians who have borne the brunt of the government’s economic reform program.

Energean seen exporting Israeli gas to Cyprus - GLOBES

9 Jul, 2018 17:39
Sonia Gorodeisky

The company is waiting for approval for a pipeline to take gas to Cyprus from the Karish and Tanin gas reservoirs.

The Reuters news agency reported last week said that another export channel for Israeli natural gas was likely to be opened soon. Greek company Energean, which owns the Karish and Tanin gas reservoirs, is waiting for the go-ahead from Cyprus to build a gas pipeline from its floating production storage and offloading (FPSO) platform to Cyprus. The quantity to be supplied is fairly small - 0.5-1 BCM per year, less than what Israel is exporting to Jordan. If the deal goes through, however, it will be very important for the Israeli gas sector because it will open up another potential market.

Reuters said that the company was now waiting for official approval to build the pipeline. Energean CEO Mathios Rigas told Reuters, "We submitted a proposal to sell gas from the FPSO (floating production storage and offloading) facility to Cyprus."

Energean gas offer to Cyprus - CYPRUS MAIL

July 7 2018

Charles Ellinas

Greek oil and gas company Energean is seeking approval from the Cyprus government to build a pipeline from its Israeli offshore gas fields and import 0.5 to 1 billion cubic metres (bcm) of gas per year to the island, Reuters news agency reported this week.

Such a deal would help Cyprus meet its obligations to switch to cleaner energy such as natural gas and renewables by 2020 if it is to avoid hefty fines by the European Commission.

This is not the first time such an offer has been made. An article released by Cyprus News Agency in December 2017 said that Energean had made an informal approach to the government to develop and take Aphrodite gas by pipeline to the FPSO (Floating Production Storage and Offloading facility) it proposes to use to develop its Karish and Tanin gas fields in Israel, treat it and export it to Cyprus. The offer was not confirmed by the government.

Given that Energean is offering gas to its Israeli clients at less $4.50 per million btu (about 1000 cubic feet), such an offer could have been interesting and possibly compete with Cyprus’ liquified natural gas (LNG) import plans. With Aphrodite running the risk of remaining stranded due to the low global gas prices, it merited consideration. Unfortunately, it was not considered and the offer lapsed.

Tamar Petroleum raising NIS 2.2b more on TASE - GLOBES

22 Feb, 2018 6:29

Omri Cohen

Yesterday's announcement of the agreement for exporting natural gas from Israel to Egypt is putting wind into the sails of the second bond issue by Tamar Petroleum, which own the Tamar natural gas reservoir. The Midroog rating company today announced that it had issued an A1 rating for up to NIS 2.178 billion in the Series B bonds to be issued by Tamar Petroleum. The rating is the same as for Tamar Petroleum's NIS 2.3 billion issue of Series A bonds last year.

Tamar Petroleum intends to use the amount to be raised to buy 7.5% of the rights in the Tamar reservoir from US company Noble Energy. The $800 million deal includes a $560 million cash payment, with the rest consisting of an allocation of shares, which will amount to 43.5% of Tamar Petroleum's share capital.

Midroog said that the bond issue would reach up to $605 million, but that any amount raised in excess of $560 million would be deposited in a special fund for early repayment of or buying back bonds.

Price, not politics, stymying East Med gas - CYPRUS MAIL

January 28, 2018
Charles Ellinas

The greatest problem making exports of East Med gas, especially from Cyprus and Israel, challenging and difficult, is not political risk, but commercial due to the low global gas prices. You experience political risk when you reach the point of selling. If the prospect of selling is not there, where is the risk?

Exploring and discovering the gas has not been stopped due to political risk. But despite strong EU support, neither Cyprus nor Israel are anywhere near selling their gas to Europe. They cannot find buyers.

The key limiting factor is price.

MOU for Israel-Europe gas pipeline to be signed Tue - GLOBES

3 Dec, 2017 12:48
Sonia Gorodeisky

The world's longest underwater pipeline from Leviathan to Italy will allow Israel to export gas to Europe.

A memorandum of understanding for the laying of an underwater gas pipeline from Israel to Europe will be signed on Tuesday in the Cypriot capital Nicosia, sources inform "Globes." The world's longest underwater pipeline will allow Israel to export gas to Europe.

The energy summit in Cyprus on Tuesday will be attended by Israel's Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz and his counterparts from Cyprus, Greece, Italy and the EU. The last such energy summit was held in Israel in April when the sides signed a declaration to move forward with the project.

Israel's Ministry of National Infrastructures, Energy and Water Resources says that the pipeline will be 2,000 kilometers long and will be completed by 2025.

Door still open for East Med-Egypt gas - PETROLEUM ECONOMIST

24 November 2017

Gina Cohen

Despite the country's natural gas sector booming, it could eventually need to import the fuel again

On 14 November, Egypt's oil minister Tarek El-Molla, told Bloomberg that "Egypt will stop importing liquefied natural gas in 2018 and may eventually export gas". This statement appeared to signal an end to the prospect of Eastern Mediterranean gas exports—from Israel and Cyprus—finding a market in Egypt. In Israel, much of the media interpreted his remarks as a sign that the country's hopes of exporting gas from the offshore Leviathan and Tamar gas fields to Egypt were dead.

At present, it's hard to imagine a day when Egypt would again be looking abroad for supplies. The second half of 2018 will be a golden moment, with its legacy gasfields still producing strongly, and the first phase of the mega-giant offshore Zohr field ramping up towards full production of around 76m cubic metres a day.

On the export front, even today, despite the shortage of gas supply for the local market, Egypt has allowed small volumes of liquefied natural gas sales, via Shell's Idku facility (0.8bn cm/d in 2016 and an expected 1.2bn cm/d in 2017).

Investors to discuss solution for rising natural gas bills for industry with MPs on Tuesday - ENTERPRISE

Gas tanks at Suez city north of Cairo. (Reuters)

Sunday, 19 November 2017

Industrialists to discuss rising natural gas bills with House on Tuesday: A delegation from the Union of Egyptian Investors Association (UEIA) will meet with the House of Representatives’ Industry Committee on Tuesday to discuss challenges they’re facing due to rising natural gas bills, UEIA boss ad Oriental Weavers founder Mohamed Farid Khamis said on Thursday, Al Shorouk reports. 

Natural gas supply has been interrupted at a number of factories that fell behind on bill payments, which they say they are unable to make, Khamis said. We had heard last week that the House was looking into repricing gas for industry and canceling real estate taxes on factories following complaints from industry figures. Egypt’s manufacturing sector has been pushing for years to lower gas prices, but officials had hinted in August that it was unlikely the Ismail Cabinet would follow through on the decision.

Israeli Natural Gas Cartel Seeking Testimony From Top Treasury Officials About Gas Deal - HAARETZ

Nov 06, 2017 4:36 AMIdo Baum 
Noble Energy fighting class action suit over gas prices agreed between cartel and Israel Electric Corporation

One of the partners in the Tamar natural gas field cartel, Noble Energy, is seeking to subpoena three senior Israeli government officials to testify in Central District Court for a hearing over a class action suit against the cartel.

The officials are Shaul Meridor – the outgoing director general of the Energy Ministry – who was chosen to head the Finance Ministry’s budget division; Udi Adiri, the outgoing deputy head of the budget division, who is slated to switch places with Meridor and be the next director general of the Energy Ministry; and Morris Dorfman, who was deputy head of the National Economic Council and now serves as head of the Health Ministry’s regulatory division.

All three played key roles in putting together the framework agreement two years ago.

According to the subpoena request filed last week, cartel officials believe these witnesses can shed light on the fact that the natural gas price in Israel was set under Israel’s authority.

Israel Electric wants to reopen Tamar gas deal - GLOBES

28 Jun, 2017 15:58
Nati Yefet

The company is paying $6 per MMbtu compared with $4.70 paid by private electricity producers.

The Israel Electric Corporation (IEC) (TASE: ELEC.B22) board of directors has ordered the company's management to negotiate the reopening of the gas agreement with the Tamar natural gas reservoir partners. IEC is paying nearly $6 per MMbtu, compared with $4.70 paid by the private electricity producers. The price is expected to continue rising, because it is linked to the US consumer price index.