Steinitz approves first gas export deal to Egypt | Jerusalem Post

"After years of debate and delay, we are beginning to move forward, and to position Israel as a natural gas super power in the region," Steinitz said on Wednesday.

By SHARON UDASIN \  12/23/2015

National Infrastructure, Energy & Water Minister, Yuval Steinitz granted his approval on Wednesday for the first deal to export gas from Israel to Egypt. 

The deal, a 7-year agreement signed between the Tamar reservoir partners and Egypt's Dolphinus Holdings Limited in March, aims to convey 5 billion cubic meters of gas through the now defunct East Mediterranean Gas pipeline, which used to bring gas in the opposite direction, from Egypt to Israel. The EMG company, however, has repeatedly denied its involvement in or recognition of such a deal. 

"After years of debate and delay, we are beginning to move forward, and to position Israel as a natural gas super power in the region," Steinitz said on Wednesday. 

In addition to the fact that EMG continues to reject the agreement between the Tamar partners and Dolphinus, the gas export arrangement also still may face some hurdles within the Egyptian government. 

In 2008, two Egyptian national gas companies began selling gas to the Israel Electric Corporation, through the EMG pipeline – supplying the country with about 40 percent of its natural gas provisions. Yet saboteurs began thwarting the flow through Sinai pipeline explosions in 2011, which ultimately led the Egyptian government to terminate the gas sale agreement with Israel in April 2012. 

Earlier this month, the International Chamber of Commerce awarded the IEC $1.76 billion in compensation from the Egyptian national gas firms, prompting the Egyptian government to declare a freeze in gas import talks with Israel. 

Nonetheless, Steinitz maintained that authorizing gas exports to Egypt is "a sign of cooperation in energy that will develop in the coming years with countries in the region, such as Egypt, Jordan, Greece and Turkey – and with European countries in general." 

In mid-November, the Leviathan reservoir partners signed a letter of intent with Dolphinus as well, to negotiate the export of as much as 4 billion cubic meters of gas annually for 10-15 years, through the EMG pipeline.  At the time, representatives of EMG likewise denied that any such talks were taking place. 

Aside from the Dolphinus deals and negotiations, the Tamar partners signed a 15-year letter of intent in May 2014 for the provision of 71 BCM to the Spanish Union Fenosa liquefied natural gas (LNG) production plant in Damietta, Egypt. Meanwhile, in  June 2014, the Leviathan partners signed a letter of intent for the 15-year supply of 105 BCM to the empty British Gas liquefaction plant in Idku.

Also in the gas sector on Wednesday, Steinitz announced that he was appointing a professional team to guide the implementation of the country's natural gas outline – which was officially activated by Prime Minister Benjamin Netanyahu last Thursday. 

Leading the inter-ministerial team will be Energy Ministry director-general Shaul Meridor, with the participation of Petroleum Commissioner and Natural Resources Administration director Yossi Wurzburger, Natural Gas Authority director Alexander Varshavsky, Finance Ministry Budget Department director Amir Levi, forthcoming National Economic Council chairman Avi Simhon, Environmental Protection Ministry director-general Yisrael Dancziger, Economy Ministry director-general Amit Lang and Deputy Attorney-General Avi Licht. 

The team has been tasked with ensuring that country's natural gas companies are complying with the terms of the outline, and will be required to file quarterly progress reports to the ministry. 

"Finally, after years of discussions and delays, we are taking practical steps to develop natural gas in Israel," Steinitz said. "The team, which includes senior officials from relevant ministries to advance the matter, will ensure the removal of possible obstacles to expected development."

SOURCE

Turcas CEO: Israel gas will flow to Turkey by 2020 | Globes

Batu Aksoy predicts that half of the gas in Israel's Leviathan field will be exported to Turkey.

23/12/2015, Hedy Cohen

"Half of the natural gas in Leviathan, 250 BCM, is slated for Turkey in the next 20-30 years. Starting in 2020, 8 BCM of gas will flow to Turkey each year," Turcas Petrol CEO Batu Aksoy stated yesterday at a press conference in Ankara. His remarks were widely reported in the Turkish press.

"In terms of the eastern Mediterranean gas, the Turkish-Israeli friendship is based on long-lasting history. As we enter the year 2016, we are in a period where we must further enhance our connections with not only our neighbors but also world countries." For months, the owners of the rights to the Leviathan gas reservoir have been negotiating the exporting of Israel gas with Turkish companies, including Turcas and Zorlu Petrogas Petrol Gaz. As of now, however, no concrete deal is yet being discussed. Since the Marmara incident, relations between the countries have deteriorated, and Turkish President Recep Tayyip Erdogan has banned imports of gas from Israel. Given the difficulty in exporting Israel gas to Egypt, however, and in view of the fact that Turkey has experienced repeated disruptions in its supply of gas from Russia, both sides have expressed a desire to renew the negotiations.

Only two weeks ago, "Globes" interviewed Turcas board member Matthew Bryza, who asserted that economically and strategically, exporting gas to Turkey is currently the best option for development of the Leviathan reservoir. "We need energy and we are willing to pay for it," Byrza said, adding that exporting gas to Turkey was also the best option for Israel. "The Israeli gas that Turkey could buy from Israel will be purchased at a lower rate than its other suppliers, but still higher than the price Israel would receive from Egypt,” he claimed.

Aksoy is now officially backing this line, saying, "Israel can help Turkey become a hub" and "Turcas is part of a consortium of companies that wants to import Israeli gas and market it to customers in both Turkey and Europe."

Aksoy spoke about Turkey's need to diversify its sources of supply, and stated, "Diversification of Turkey's natural gas sources, which will include Israel, among others, will help it lower the price of energy in the country… There have been substantial gas discoveries in the Middle East… We can achieve our goals only through resource variety."

The Turkish economy's consumption of gas is seven times that of the Israeli economy, and is projected to increase sharply and double in the next 20 years. Turkey has no gas resources itself, and is being forced to import gas from Iran, Russia, and Azerbaijan. Turkey pays a high price for the gas it buys: an estimated $15 per MMbtu to Iran, $12 per MMbtu to Russia, and $10 per MMbtu to Azerbaijan.

A pipeline is cheaper than LNG

The Turcas CEO also spoke about building a gas pipeline connecting Israel and Turkey, saying that exporting through a pipeline is always cheaper than exporting liquefied natural gas (LNG). He thereby hinted that exporting through the liquefaction facility in Egypt would be more expensive for Israel.

"A pipeline in the Middle East will be cheaper than exporting as LNG," Asksoy said, adding that the tension between Turkey and Russia only reinforces the need to build such a pipeline. If Israel exports gas to Turkey, it will be through an undersea pipeline from the Leviathan reservoir through Cypriot territorial waters to the southernmost place in Turkey, a distance of 485 kilometers from the reservoir.

Beyond the technical difficulties of building a pipeline in relatively deep water, another difficulty is that up until now, Cypriot prime ministers have rejected the idea, due to the tense relations between Cyprus and Turkey, which occupied the northern part of the island in 1974. Bryza commented on this in an interview, saying that the political disputes on the island were probably close to a solution, and that a referendum on the matter would be held in Cyprus next fall.

"Settling the conflict will help move the gas pipeline forward, and Cyprus will be very interested in such a pipeline," he said, adding, "Gas can be sent to Cyprus through the pipeline, and when the Aphrodite reservoir is developed, the direction of the pipe can be reversed, with gas flowing from Cyprus to Turkey," Aksoy asserted.

Published by Globes [online], Israel business news - www.globes-online.com - on December 236, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

SOURCE

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Same story in the Cypriot press follows:
Turkey could take Israel’s gas by 2020 | in-cyprus.com (Cyprus Weekly)
23/12/2015

The rapprochement between Israel and Turkey could see a rapid deal on gas, with the prospect of Turkey taking imports of gas from Israel by 2020, according to Turkey’s Today’s Zaman newspaper.

“We consider the Mersin port a feasible destination for Israeli gas,” the chief executive officer of Turcas Batu Aksoy told Today’s Zaman.

“The pipeline could then be connected either to the current infrastructure with some extra investment or to [the Trans-Anatolian Pipeline] TANAP, which is under construction. … The third option is to build one from scratch.”

Turkey and Israel are currently in talks on restoring official ties between the two countries after they broke down in 2010 following the Mavi Marmara incident. A final deal will not take long, a Turkish official told Reuters on Friday.

“I think that there is a serious, meaningful chance for thawing and normalising relations between Israel and Turkey. I also think that this is proof of the diplomatic value of the gas and the gas plan,” Israeli Energy Minister Yuval Steinitz told Tel Aviv radio.

The main obstacle to the long-delayed development of Israel’s giant Leviathan field was finally removed last Thursday when Prime Minister Benjamin Netanyahu signed a gas framework agreement after invoking Article 52 of the restrictive trade practices law to bypass a ruling from antitrust authority.

Delek, which is a partner in both Leviathan and the Cyprus Aphrodite field, announced shortly thereafter that it would “carry out the necessary actions for the rapid development of the Leviathan field and the expansion of the Tamar field”.

Given the ongoing conflict in Syria and the fact that Israel does not have a liquefied natural gas (LNG) plant, supply of Israeli gas to Turkey would probably have to go through the Exclusive Economic Zone (EEZ) Republic of Cyprus, which has no diplomatic relations with Turkey.

Under Article 79 of the UN Convention on the Law of the Sea (UNCLOS), “all States are entitled to lay submarine cables and pipelines on the continental shelf”. At the same time, “The delineation of the course for the laying of such pipelines on the continental shelf is subject to the consent of the coastal State.”


However, neither Israel nor Turkey are parties to UNCLOS. Nor is the US, the home of Noble Energy, also a partner in both Leviathan and Aphrodite.

SOURCE

Egypt struggles to pay for oil, LNG supply amid foreign currency crisis | Reuters

LONDON/MILAN | By Sarah McFarlane and Libby George

Dec 23 - Egypt is struggling to pay for U.S. dollar-priced oil product and liquefied natural gas (LNG) imports, cancelling purchases, and asking suppliers to extend payment terms amid an acute foreign currency crisis, industry sources said.

Egypt, which depends on oil and gas imports, has faced a sharper decline in foreign currency receipts after a plane carrying Russian tourists crashed in October while low oil prices limit aid from Gulf allies, banking and trade sources said.

The sources said that Egypt has asked oil and LNG suppliers to extend payment terms to 90 days after delivery earlier this month due to its foreign currency crisis.


Egypt is struggling to pay for U.S. dollar-priced oil product and liquefied natural gas (LNG) imports, cancelling purchases, and asking suppliers to extend payment terms amid an acute foreign currency crisis, industry sources said.

Egypt, which depends on oil and gas imports, has faced a sharper decline in foreign currency receipts since the Russian airliner disaster in October, which has hit tourism, while low oil prices limit aid from Gulf allies, banking and trade sources said.

The sources said that Egypt has asked oil and LNG suppliers to extend payment terms to 90 days after delivery earlier this month due to the currency crisis.

According to existing arrangements, Egypt is obliged to pay for LNG imports 15 days after a cargo unloads.

"The combination of the weaker tourism sector, along with low oil prices tightening the budgets of GCC countries who have traditionally helped Egypt pay for commodities, is hitting foreign currency reserves," a banking source said.

"These elements and the Central Bank's wish not to close the year while depleting the levels of reserves triggered the request (to extend payment terms)," he said.

Short of dollars, Egypt has also cancelled the purchases of six gasoil cargoes initially scheduled for early January, oil market sources said.

"Those who can handle it will consider the extended payment," one oil trader said.

Payment delays have created a logjam of cargoes outside Egyptian ports, including at least six clean and three dirty product cargoes.

A source familiar with the matter estimated that Egypt is late in paying around $350 million to LNG suppliers.

"There's a possibility that some suppliers will not be accommodating and will walk away," he said, although LNG suppliers surveyed by Reuters denied they had any such intention.

Egypt imports around six to eight cargoes of LNG per month, valued at around $20 million to $25 million per cargo.

Its suppliers include BP, Shell, Gas Natural, Trafigura, Vitol, EDF Trading, PetroChina and Noble.

Egypt has emerged as a major new market for LNG as the government looks to ease the worst energy crunch in decades.

Falling output and rising demand have transformed the country from an oil and gas exporter to net importer.


Meanwhile on Wednesday Egypt's General Authority for Supply Commodities said it had changed the terms of payment for wheat purchased in its tenders.

(Additional reporting by Oleg Vukmanovic in Milan, Dmitry Zhdannikov in London and Lin Noueihed and Eric Knecht in Cairo.; Writing by Oleg Vukmanovic; Editing by Jane Merriman, Greg Mahlich)

SOURCE

When Bibi's Right: How Gas Is Driving Turkey Back Into Israel's Arms | Haaretz

Dec 23, 2015
David Rosenberg

They made fun of Bibi for saying energy can be a strategic asset, but it seems access to Israeli natural gas is compelling Erdogan to overcome his aversion to the Jewish state.

They all laughed when Bibi sat down at the piano to play his song about natural gas and its vital role in enhancing Israel's national security. 

The prime minister has sounded the notes over and over again about how energy exports will form the basis of deep and lasting friendships with Egypt, Jordan, Cyprus, Greece, maybe even Turkey. But this is the Middle East, his critics sneered, where the basis for alliances is politics and religion, not business and economics. Anyhow, Egypt recently found plenty of its own gas and has enough to supply Jordan, too, so they don't need Israel, they said.

Cyprus-Jordan pipeline talks intensify | in-cyprus.com (Cyprus Weekly)

23/12/2015

Relations between Cyprus and Jordan are said to have strengthened as the two countries intensify talks over a gas pipeline.

Two meetings have already taken place between Energy Minister Yiorgos Lakkotrypis and the Jordanian Minister of Energy and Mineral Resources Ibrahim Saif with the most recent between the two men taking place on Tuesday. The two meetings have already seen the resumption of technical committees from both countries being assembled to look into ways of transferring gas from Cyprus’ sea reserves to Jordan situated some 570km away.

The talks between the ministers were spurred on by an agreement between the government of Cyprus and Jordan during President Nicos Anastasiades’ recent visit to Amman.

The two committees will look into the possibility of transporting natural gas from Cyprus to Jordan via a pipeline but also the possibility of transferring the gas in liquid form.

Transferring the gas via Egypt is proving difficult due to the instability in the Sina Province which has already seen pipelines linking Egypt and Jordan destroyed.

In recent years, Sinai has been the site of several terror attacks against tourists, the majority of which are Egyptian. Investigations have shown that these were mainly motivated by a resentment of the poverty faced by many Bedouin in the area.

SOURCE
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SAME STORY IN NATURAL GAS EUROPE

December 23rd, 2015

CYPRUS AND JORDAN IN COOPERATION ON NATURAL GAS TRADE

A new energy alliance is germinating in the Eastern Mediterranean and its two protagonists are Cyprus and Jordan, the first one a prospective natural gas producer and the second one a natural gas customer. Yesterday (Tuesday), Giorgos Lakkotrypis, Cyprus Energy Minister and Ibrahim Saif, the Jordanian Energy Minister, met in Nicosia and announced the establishment of a technical committee to discuss options for cooperation in the gas sector.

Since 2011, Jordan has suffered from natural gas shortages due to terror attacks that damaged the pipeline that transmitted gas from Egypt to Jordan through Sinai. Following those incidents, gas supply from Egypt was halted and, for a few years, Jordan's power generation was based on expensive and emissions-rich oil.

This year Jordan started importing LNG cargoes from Qatar through Shell. An FSRU ship is anchored near Aqaba port in the Red Sea and convert the LNG into gas that is then transmitted through a pipeline to various customers, mainly for power generation.

According to the Cyprus Mail, the ministers haven't ruled out a cooperation between Cyprus, Jordan and Greece with the possibility of adding Egypt to the mix.

In 2011 Noble Energy, the American E&P energy company, and Delek Group, the Israeli business group, discovered a 4.5 trillion cubic feet (tcf) natural gas field offshore Cyprus, Aphrodite. Since then, not much has changed and the gas field is still awaiting development.

The two energy ministers discussed options to transmit that gas from Cyprus to Jordan through Egypt either by pipeline or as LNG, though the second option seems less viable because of the short distance from the Egyptian shore to Jordan. Israel, which could be viewed as a natural transit country, wasn't mentioned, according to the report.

"About 97% of the energy needs in Jordan is imported and we regard Cyprus as a strategic partner in terms of the potential cooperation between both countries," said Mr. Saif. "We are really here to explore long-term cooperation."

Earlier this year Jordan was supposed to sign a $15-billion contract with the Leviathan Partnership in what was supposed to be one of the project's anchor contracts. The contract signing ceremony was planned to take place at the White House last January; it was cancelled due the regulatory problems that had arisen in Israel. It is still not clear whether Jordan is still committed to the agreement, which was achieved with the support and the mediation of the U.S. State Department but was opposed by the Jordanian public opinion.

Developing Aphrodite efficiently will demand cooperation between Cyprus and Israel, in order to reach a unitisation agreement, so the development will be carried out in coordination between Leviathan and Aphrodite. Those two fields are close to each other and are under the same ownership of Noble Energy and Delek Group, a situation that should ease commercial negotiations. When political issues between Cyprus and Israel are resolved and commercial terms are concluded, it will be logical and more secure to transmit Cypriot gas to Jordan through Israel. However public opinion in Jordan largely opposes contact with Israel--likely even if only as a transit territory for gas purchased from Cyprus.

Next year the Tamar partners are supposed to start delivering natural gas to Arab Potash Company, a Jordanian company, based east of the Dead Sea, in a relatively small contract of 1.8 billion cubic metres in 15 years and worth $500-$700 million.

Ya'acov Zalel

SOURCE

Cyprus and Jordan activate technical committees on natural gas | Sigma Live

22.12.2015

Cyprus and Jordan announced on Tuesday the activation of technical committees to discuss the details of a possible cooperation in the gas sector.

The announcement was made at a meeting Cypriot Minister of EnergyYiorgos Lakkotrypis had with his Jordanian counterpart Ibrahim Saif, following Lakkotrypis' visit to Jordan in September 2014 and Cypriot President`s NicosAnastasiades visit to Amman in November.

After the meeting Saif said that he regards Cyprus as a strategic partner in terms of the potential cooperation in the energy sector and did not rule out the next meeting at Ministerial level to be tripartite between Jordan, Greece and Cyprus or even quadrilateral with the addition of Egypt.

Yiorgos Lakkotrypis and Ibrahim Saif

"Based on the memorandum signed in 2014 during my visit to Jordan, we agreed to activate the technical groups to discuss the technical details of a possible cooperation in the gas sector", said Lakkotrypis in joint statements with Saif.

Through this effort, he explained, “we want to explore the necessary infrastructure, what is there, what is needed, whether it relates to underwater pipelines or concerns liquefied natural gas, which Jordan currently imports to serve its own needs.”

He said the two countries will continue to work, in order to deepen and broaden their relations in both commercial, technical and economic level.

In his statements, Saif said that energy was one of the main sectors that the two countries could establish long-term relations.

“About 97% of the energy needs in Jordan is imported and we regard Cyprus as a strategic partner in terms of the potential cooperation between both countries”, he pointed out.

Saying that technical groups between the two countries will sit at the same table and examine "the same map," Saif referred to the developing gas network in the region and the place of his country in that network.
“Definitely we are looking at how we can utilise better the existing infrastructure and the existing routes of the potential infrastructure, so we can work together. Not only are we talking about short term cooperation, we are really here to explore long-term cooperation, we want to maximize and utilize to the maximum possible the infrastructure that exists now but also the infrastructure that could be built in the near future”, he added.

Asked whether they discussed the possibility of a bilateral or trilateral mechanism between Cyprus, Jordan and Greece or with Egypt, Saif said indeed it was at the heart of the discussions. As he said, they have discussed the possibility of a trilateral or a quadrilateral ministerial meeting where Egypt, Greece, Jordan and Cyprus could discuss potential cooperation at that level.

According to reliable sources, Jordan wants to import gas from Cyprus. The country currently covers its energy needs by buying liquefied natural gas from “Shell”, since the import of natural gas from Egypt via Sinai was interrupted by terrorist acts. A collaboration between Cyprus and Jordan may involve transfer of the Cypriot gas to Egypt and from there to Jordan. The Ministers have studied two options, either via pipeline or by the method of liquefied natural gas.
— (KYPE)

SOURCE



Same story as reported in Jordan
Energy minister, Cypriot counterpart discuss cooperation

Nicosia, Dec. 23 (Petra) -- Minister of Energy and Mineral Resources, Ibrahim Saif, and the Cypriot Minister of Energy, Commerce, Industry and Tourism, Yiorgos Lakkotrypis, on Wednesday, discussed cooperation in the fields of natural gas and renewable energy.

During a meeting held in the Cypriot capital Nicosia, both sides reviewed the Jordanian-Cypriot cooperation to benefit from the Cypriot natural gas production.

Saif was briefed on the Cypriot plans to export natural gas discovered in the Aphrodite gas field. He also discussed with the Cypriot minister ways to establish a network for natural gas in the region.

A Memorandum of Understanding was signed between the two countries in 2014 to exchange expertise in the field of energy, hydrocarbon exploration, infrastructure in addition to exporting Cypriot natural gas to Jordan.

//Petra// 
23/12/2015 - 02:06:16 PMSOURCE

Ninth extension for interim gas project | Cyprus Mail

December 22, 2015 Cyprus

The Natural Gas Public Company (DEFA) has again extended the validity of a tender for the import of natural gas for electricity generation.

The tender validity period, which previously expired on December 18, has been pushed back to February 12, 2016.

It is the ninth consecutive extension since the call for tender was issued in January 2014.

The DEFA tender calls for the supply of between 0.7 and 0.95 billion cubic metres of natural gas annually to the Cypriot market through two delivery routes. One route will begin supplying gas in early 2016 and the other no later than the second half of 2017.

DEFA is by law the sole importer and distributor of natural gas in Cyprus. Once it concludes a deal for natural gas with a supplier, DEFA will then sell the fuel to the power company.

Cyprus is reliant on heavy fuel oil imports for electricity generation, and wants to switch to the cheaper natural gas until its own offshore reserves come on tap.

DEFA’s end-stage negotiations with preferred bidder, Vitol, have dragged on for months. The Dutch energy firm is proposing a solution involving a Floating Storage and Re-gasification Unit (FSRU).

Tankers transporting LNG dock with an FSRU and load the liquid gas onto it. A vaporizer on board the FSRU – sitting out at sea, at a short distance off the coast – turns the liquid into gas, which is piped ashore. The gas is then burned to generate electricity.

Also in the running is Delek, the only bidder proposing to pipe the gas directly from the source – Israel’s Leviathan gas field.

This is the second tender for the import of natural gas. The first was scrapped in autumn 2013, when DEFA broke off talks  with the then-preferred bidder, Russian company Itera.

SOURCE

Egypt’s overdue debts prompt BG to further postpone linking gas fields to mid-2016 | Daily News Egypt

Project will only offset the natural decline of fields production, says official

The British Gas Company (BG) has once again postponed linking stage 9B to the Burullus fields to mid-2016 rather than the beginning of 2016, due to delayed repayment of Egyptian debts.

A senior official at the Ministry of Petroleum told Daily News Egypt that BG postponed the project for the second time, when it was agreed in 2013 that the linking will be completed by the beginning of 2015. The first postponement resulted in pushing the deadline for linking 9A to mid-2015.

The official said the total production of stage 9B will be a maximum of 500m cubic feet of gas per day.

The official said stage 9B is the largest project to begin production in 2016, but will not increase Egypt’s total production, as it would offset part of the natural decline of field productivity.

Egypt has recently agreed with BG to raise the price of natural gas produced to stage 9B from $3.95 per million British Thermal Units (BTUs) to $5.88.

The Ministry of Petroleum had earlier promised foreign companies to pay $500m of its total overdue debt, currently at $2.7bn, by the end of 2015. The agreement has yet to be met.

BG’s total production declined to about 850m cubic feet per day during the first quarter of the current fiscal year after linking stage 9A, compared to 1.1bn cubic feet at the beginning of 2014.

Foreign partners in the oil sector have delayed the linking of their gas fields in response to the government’s failure to pay overdue amounts. This is expected to lead gas production to decline until the end of 2016.

The official said total Egyptian gas production is estimated at 4.106bn cubic feet per day, although it is declining by 100m feet every month.

SOURCE

Libya's oil company says signs shipment deal with Egypt | Reuters

Monday, 21 December 2015
The state oil company of Libya's eastern government has signed a deal to sell 2 million barrels of crude to Egypt, a spokesman said, boosting its efforts to win exports even as most trading companies prefer to deal with the rival western government.

The eastern government has for months been pushing to sell oil of its own without passing through the control of the Tripoli NOC and central bank in the west of the country, securing revenue from Libya's biggest natural resource.

Egyptian officials were not immediately available to confirm the agreement and the eastern oil company advisor Mohamed al-Menfi gave no further details.

Caught in chaos after the 2011 ouster of Muammar Gaddafi, Libya has two rival governments, each operating separate national oil corporations (NOCs) and oil ministries, creating confusion over the control of oil assets.

Western powers recognize the government in the east of Libya after an armed faction took over Tripoli last year and set up its own government. But the Western powers and most oil traders only recognize the original NOC, which is based in Tripoli and not in the east of the country.

A delegation from the eastern NOC headed by chairman Naji al-Moghrabi had visited Egypt and signed a deal for the crude shipment and also for training and exchanges related to the oil industry, al-Menfi told Reuters on Sunday.

"The shipment of 2 million barrels has not been sent yet to Egypt," he said.

Delegates from Libya's warring factions signed a U.N.-brokered agreement last week to form a national unity government, a deal which Western powers and Libya's North African neighbours hope will bring stability.

SOURCE

Analysis: Turkey Balances on Brink of Gas Supply Crisis | Platts

Istanbul (Platts) -- 21 Dec 2015 824

* Existing entry point capacity is 193 million cu m/d
* Peak Turkish demand could reach 215 million cu m/d
* More cuts of supply to CCGT plants expected 

All eyes in the Turkish gas market have been focused on the possibility of a cut in supplies from Russia in the wake of the November downing of a Russian fighter jet.

But even if all Turkey's gas suppliers fulfill their contracts, the country still faces serious problems.

Turkey's gas consumption last year reached 48.72 Bcm, 7.74% up on the 45.2 Bcm reported in 2013.

This year it was expected to exceed 50 Bcm, perilously close to Turkey's total import portfolio of 52.05 Bcm/year.

While that portfolio was last month boosted by a deal with Qatar for an unspecified number of spot LNG cargoes, that extra supply would only help cover any shortage caused if any of Turkey's other suppliers fail to deliver necessary volumes.

It could not overcome the limitations of Turkey's gas infrastructure, mostly operated by state gas importer and transit operator Botas.

Such is the fine balance between Turkey's potential daily maximum gas demand and the technical limitations of the country's gas infrastructure that all it would take to trigger a shortage is a particularly cold period.

Given the unpredictability of Turkish winters, that could happen any time between now and the end of February, or not all.

And given that any new pipeline gas will only arrive in Turkey at the end of 2018 at the earliest when first Shah Deniz gas arrives via the TANAP link, the tight supply/demand balance is likely to be an issue for the next three, possibly four, winters.

DAILY CAPACITY

In August 2014, Platts reported daily demand for gas could reach 215 million cu m/day, while Turkey's existing gas delivery infrastructure could supply a maximum of 193 million cu m/d.

The problem was confirmed the following month by then energy minister Taner Yildiz who said gas demand could exceed the system's ability to supply during the following winter if the country experienced extremely cold weather. Since then little has changed and therein lies the problem.

The capacity of the entry points to Botas grid remain unchanged: Four major pipeline entry points, two of which carry gas from Russia, one from Iran and one from Azerbaijan; two LNG terminals one on the Sea of Marmara operated by Botas and a privately operated facility at Aliaga on Turkey's Aegean coast; and one underground storage facility under the Marmara and some limited local production, itself in decline.

The only new addition to Botas's system is a new loop line across the Sea of Marmara that will not increase entry capacity but will allow flexibility transferring gas arriving from the south and east, northwest to Turkey's main demand center Istanbul.

As it happened, last winter proved mild by Turkish standards though the country still suffered a limited shortage when plummeting January temperatures caused gas demand to rise above supply.

'CURTAILMENT PROCEDURE'

A major crisis was avoided when the ministry implemented its 'curtailment procedure', a process of consultation involving state and private sector bodies.

The first stage sees state gas-fired power plants switching to fuel oil from gas.

A second stage sees major private CCGT plant ordered to cut gas burn by 50%, and a third sees those same plants being forced to burn fuel oil alone.

The procedure was implemented to stage three twice during January and February this year with nine major CCGT plants totaling 10 GW told to switch fuel.

That procedure has already been implemented to stage two once this winter, with operators of CCGT plant of over 500 MW instructed to cut gas burn by 50% from December 10-14.

That cut was made in the wake of a 50% cut in supply from Iran for 36 hours on December 8-10.

While private plants were given the go ahead to return to normal consumption, and private generators have told Platts that Botas has assured them that all of Turkey's gas suppliers are supplying at normal volumes, it was unclear whether the four state-owned gas fired plant totaling 3.78 GW have also been cleared to burn gas again.

CUT RISK

With Turkey's gas infrastructure unable to meet peak demand in cold weather, further cuts in supply and requests for fuel substitution were inevitable, an official from one private generator told Platts.

And that is not taking into account possible cuts from suppliers such as Iran and Russia.

These, he said, were a real possibility with Russia and Turkey still at loggerheads over the downed plane. If Gazprom were to supply only the minimum contracted gas volumes needed to meet its legal commitments, that would leave Turkey suffering a major shortage.

Although clearly a risk, such fears were not universally held.

Another official from Turkey's private power sector said that because Russia was facing financial difficulties, it would be wary of cutting existing revenue streams.

Any reduction, however limited, could prove serious.

While only 29% of Turkey's 72.5 GW installed capacity is gas-fired, this capacity generates anything up to 51% of the power consumed in a given month.

The variation depends on water levels in Turkey's hydro dams, which account for 35% of capacity.

With most of Turkey having experienced a particularly dry period at the end of November, state grid operator TEIAS said the dams held a total 2.528 trillion cubic meters (tcm) of water, down 20% on the volume anticipated in Turkey's 2015 generating program and 16% below the long-term average for November.

More worryingly, it was also down 13% on levels reported at the end of December 2014, only days prior to Turkey implementing its curtailment procedure and forcing private CCGT plant to switch to fuel oil.

So, while the winter remains mild, Turkey may escape without suffering any real hardship.

But it still seems under-prepared for significant shortages until TANAP begins pumping gas.

--David O'Byrne, newsdesk@platts.com
--Edited by Dan Lalor, daniel.lalor@platts.com

SOURCE

An Israeli Gas Pipeline to Turkey? Bad Idea | National Review

December 20, 2015
DANIEL PIPES

News that the Turkish and Israeli governments are about to renew full diplomatic relations after years of tensions causes me to smile cynically — and to worry again about Israeli gullibility. 

The two states enjoyed close relations in the 1990s, when a common world outlook led to a strong military bond, growing trade, and exchanges of people and culture. Writing in 1997, I characterized this bilateral as having “the potential to alter the strategic map of the Middle East, to reshape American alliances there, and to reduce Israel’s regional isolation.” 

Gas Subsidiaries Update | Delek Group

Update With Regards to the Extension of the Public Tender for the Supply of Natural Gas to Cyprus

Tel Aviv, Sunday, December 20, 2015. Delek Group's gas subsidiaries announced that they have accepted a request by DEFA (a Governmental gas company owned by the Government of Cyprus) to postpone the period of validity of a proposal for the supply of natural gas from December 18, 2015 to February 12, 2016. The proposal is for the supply of natural gas through pipelines from the Leviathan project.

Accordingly, the commercial examination process and the negotiation between DEFA and the bidders are expected to continue in the near future.

For more information please see the immediate reports as published on TASE.
http://mayafiles.tase.co.il/

The [above] updates are based on information released by Delek Group gas subsidiaries, Delek Energy Systems Ltd., Avner Oil & Exploration L.P and Delek Drilling L.P. All financial and business information is given only for the convenience of the reader. The only official financial and business information, is that which is included in the officially published immediate reports and financial reports of Delek Group and its gas subsidiaries, to the Israeli Securities Authority and the Tel Aviv Stock Exchange, in Hebrew. In the event of any conflict between financial and business information given on this site and the Hebrew published immediate reports, the Hebrew published immediate reports shall prevail. More on Delek Group's disclaimer.

All contents © 2015 Copyright 2015 Delek Group. All rights reserved

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The strategic plane: Russia in the Mideast energy cauldron | Daily News Egypt

A journalist friend had told me a while ago, without naming who or when, that Russia was ready for a major strategic entrance into the region through its air campaign in Syria, compensating for all those years of being muscled out of the region with the end of the Cold War and the fall of communism.

Emad El-Din Aysha, December 20, 2015

He also told me there was a strong set of economic motives involved in this, since the Russians had first tried to re-enter the region through the Israeli natural gas finds, offering to provide the offshore platforms with a de facto security umbrella from pesky terrorist missile attacks. But the Israelis would not budge – hence the Syrian campaign and Syria’s own not insignificant oil and natural gas resources entering firmly into the Russian orbit. What happened with the downed Russian fighter-jet was to be expected, given that Turkey woke up one day and found that their neighbour to the south had just become a giant Russian military base, placing the country in a pincer movement with the Russians to the north and south.

Syria has always been Russia’s bridgehead into the Middle East and Mediterranean, especially ever since Stalin lost Yugoslavia to the Non-Aligned Movement (and NATO). That is why the Soviets did not back Syria’s unity with Egypt, threatened late Egyptian president Gamal Abdel Nasser over keeping Syria in the union by force, and were not even very keen on Syria uniting with Iraq. They were also keener on punishing the Israelis in the wake of the 1967 War over Syria than they ever were with Egypt. Abdel Nasser was too independent to control and a Syria united with a regional power like Egypt, or Iraq, could lose them a compliant ally. So there are parallels the between what’s happening now and what took place during the height of the Cold War.

The same holds true, in my humble opinion, of the ill-fated Russian passenger plane crash in Egypt on 31 October. It has been said that the bomb used – if indeed it was a bomb – was an altitude-sensitive device, which recalls Lockerbie. It could be, and this is just a supposition, that Russia is being punished for its regional ambitions, especially as those ambitions do not seem to be directed at “Islamic State” (IS), but rather only at the Syrian opposition, Islamists and non-Islamists alike.

Lockerbie was certainly utilised to go after Gaddafi, another Soviet ally in the Mediterranean, and that tragic event was used to embargo his country into long-term Western submission. Look how France has been drawn into Syria with the Paris attacks. And Russia and France are both allies of Egypt. Our tourist industry has been hit before by terror attacks, and Russian (and Ukrainian) tourists have always been the more loyal to the country, staying here in droves no matter how unstable things get, unlike the Western variety.

Iran was “punished” itself during the Iran-Iraq war, when the Americans accidentally shot down a civilian plane too, so these tactics are all too familiar even to the untrained eye. It is also disturbing that a technology from the 1980s (altitude-sensitive triggers) is making a comeback, which would indicate that the people responsible are old-timers themselves, not part of the cyber-terrorism generation at all.

Even if IS’s proclamations of guilt are not a propaganda ploy, that does not mean there are not prying hands operating behind the scenes. Look what Nafeez Ahmed has uncovered over the culpability of NATO members in harbouring Islamists of all walks operating in Syria. Turkey, it seems, has been selectively bombing Syria itself, while Iraqi oil is smuggled through the country. This does not mean the central government has anything to do with it but, if history is a guide, during the long drawn out war with the PKK drugs trafficking took place on both sides to fund or profiteer from the conflict.

Ahmed also surmises that oil and gas are a big part of the equation given that Syria is a planned outlet for Iranian oil and gas to the, you guessed, Mediterranean. We can add here IS’s role in further depressing the global price of oil, literally selling individual barrels at $30 or less. What is seldom understood about Iraq is that the country never supported the Arab oil embargo during the 1973 October War. Iraq has always been more concerned with expanding its market share than buoying up profits from a rising price of oil. A higher price would actually lose it customers to its cheaper competitors.

To quote the dearly departed Saddam Hussein: “There are attempts by imperialist and Zionist quarters in the world to distort the Arab attitude concerning oil. They constantly try to connect inflation to price increases, forgetting or ignoring the role of industrialised countries, monopolies and stock-exchange bargains in the question of inflation. These are the basic factors in inflation where oil forms a minor part. As a part of this plan, these attempts try to isolate the Arabs from the Third World countries by suggesting that the economic difficulties of those countries are basically caused by oil price increase.” (Quoted in Saddam Hussein, Iraqi Policies in Perspective: Text of President Saddam Hussein’s Press Conference, 20 July, 1980, Baghdad, 1981).

How prophetic, given the surge in oil prices that extended from 2003, when Iraq was invaded, to 2014, when Saudi Arabia all of a sudden decided it was time to over-produce. Speculation in the commodities markets was to blame at the time, and inflation is going up everywhere, even with low fuel prices. Remember that oil prices collapsed in the 1990s, even though Iraq was completely offline thanks to the sanctions regime. IS activity is also scaring off American oil companies operating in the post-invasion regime.

If I did not know better I would suspect that the Americans wanted to eliminate IS for the same reason they got rid of Saddam – to ensure that Iraqis could not push prices down whenever they felt like it. But, again, these are just (educated guesses).

Irrespective of whoever or whatever was responsible the Russian passenger plane, it will not keep the Russians out of the region. It will probably have the opposite effect. Russia is not as landlocked as it was during the Cold War, and the US is not as all-powerful as it once was either. The Arabs have woken up, more or less, on the mass scale and some Arab capitals are prying themselves loose both of US and Russian control. Meanwhile, Putin is on the warpath, and he will keep at it until he finds out who really did it, and there will be hell to pay, and we are likely to benefit in the end.

Emad El-Din Aysha received his PhD in International Studies from the University of Sheffield in the UK and taught, from 2001, at the American University in Cairo. From 2003 he has worked in English-language journalism in Egypt, first at The Egyptian Gazette and now as a staff writer with Egypt Oil and Gas.

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The sweet smell of Israel's gas | Israel Hayom

By Boaz Bismuth, December 20, 2015 - Israelis have been preoccupied with the natural gas framework deal for many months. There were those who saw the considerable economic benefits in it, and those who chose to see the extra shekels that wouldn't trickle into the pockets of the public. In the meantime, however, another important benefit of the framework deal has revealed itself: It is a strategic asset of the utmost importance, even fostering Israeli-Turkish rapprochement.

Over the past few years we have been constantly warned of Israel's growing isolation. And here, all of a sudden, aside from Turkey we are seeing Greece, Cyprus, Egypt and even Balkan states batting their eyelashes at Israel's natural gas reservoirs. It is a good lesson for anyone who still doesn't understand that international relations aren't struck in some world leaders' club, but rather they are shaped by pure interests between states.

In today's world, it is important to have something to sell, and it is no less important to have something extra to offer. The Saudis, in stark contrast to us, have for years -- thanks to their endless supply of oil barrels -- been courted by the West despite their export of Salafism and jihadi terrorism. Israel, with its Western values, can in all likelihood expect an easier go of it than the Saudis. In a world hungry for energy, it is a bit difficult to boycott Israel when -- beyond its technological, medical and agricultural expertise -- it also has gas to export.

Israel's problem isn't expected to be regional isolation, rather the opposite: It will be how to choose between the different suitors. Among those vying for Israel's heart -- sorry, gas -- there are historical enmities (Turkey-Greece-Cyrpus), and herein lies the challenge: how to make amends with Turkey without upsetting the others.

Russia, incidentally, whose relations with Turkey have been tense since the downing of its plane over the Turkish-Syrian border last month, should be able to appreciate Israel's rapprochement with Turkey. After all, the Russians more than anyone understand that diplomatic interests are a vital element in any economic pact. It is the very essence of Russian foreign policy. In any case, Moscow cannot grumble to Israel due to the countries' shared understandings in regards to Syria, where Russia is working to keep President Bashar Assad, Iran and Hezbollah's loyal ally, in power.

This, in a nutshell, is the essence of the new Middle East. Some dream of goodwill among nations, but in reality all we can hope for is partnerships. We will have goodwill when the messiah comes. Here we have, if you will, another lesson in realpolitik.

And now to the Israeli-Turkish story: There is no doubt that Turkish President Recep Tayyip Erdogan has managed to dramatically erode Israel's longtime relationship with Turkey, bringing it to unprecedented lows. We have drifted far from the Ben-Gurion era "periphery doctrine," which called for Israel to develop close strategic alliances with non-Arab Muslim states in the region (such as Iran, Turkey, Chad and Ethiopia). Erdogan began his horror show at Davos in early 2009, bad-mouthing Israel on the stage he shared with former President Shimon Peres. The low point was the Mavi Marmara incident in May of 2010. Attempts to rehabilitate relations have been made ever since. The Turks were never in a rush and issued almost impossible demands, such as lifting the Gaza blockade.

Finalizing the natural gas framework was no easy task, nor was mending ties with Turkey. It is very possible that the former expedited the latter.

How nice it is to be an Israeli, and to suddenly be courted like Saudi Arabia.

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EGAS cuts its gas imports to 700m cubic feet to cope with decline in domestic consumption | Daily News Egypt

The company is to pump 2.6bn feet of gas per day to power plants

The Egyptian Natural Gas Holding Company (EGAS) has  decreased gas imports to approximately 700m cubic feet per day from the 1bn feet per day that it imported throughout November. The measure is a response to the decline in domestic consumption.

A senior official at EGAS told Daily News Egypt that domestic consumption of gas has fallen to an estimated 2.6bn cubic feet of gas per day from November’s figures of 2.85bn cubic feet daily.

The EGAS official said that gas provision has been restored to all factories, where approximately 906m cubic feet of gas are pumped daily to high-consuming factories, meeting their maximum gas needs.

Fertiliser factories receive 510m cubic feet of gas a day, according to the official with public sector factories, Abu Qir and Talkha, receiving 138m and 67m cubic feet per day respectively. A total of 65m cubic feet are transferred to the International Petroleum Investment Company (IPIC) that exports its full production.

Moreover, EGAS transfers approximately 45m cubic feet of gas a day to Misr Fertilisers Production Company (MOPCO) factories and 90m cubic feet to Al-Masriya 1 and 2 factories, as well as 42m cubic feet of gas a day to Helwan factory and 18m feet to El-Nasr.
As for high-consuming steel factories, 210m cubic feet are provided on a daily basis, divided between El-Daqahleya which receives 100m cubic feet; Suez Steel, 100m cubic feet; and Egyptian Iron, 45m cubic feet.

The official noted that the Methanex factory, a Canadian company that provides methanol, has been put back on after a yearlong stop. The factory now feeds on 125m cubic feet of gas per day.

The industrial sector has faced severe power supply shortages since 2013 as a result of Egypt’s declining gas production.

EGAS provides 61m cubic feet of gas per day to cement factories that still operate on gas and have not shifted to work on heating oil, diesel, or coal.

The official said about 25m cubic feet of gas are pumped daily to Helwan Cement factory, 25m feet to The National Cement Company, and 11m feet to El-Qatamiya Company for cement.

About 1.3bn cubic feet of gas per day are exploited for domestic usage including use in cars, houses, and low-consuming factories.

Egypt’s total consumption of gas currently is estimated at 4.706bn cubic feet of gas per day, where 4.106bn cubic feet of local production is provided for Egyptian fields.

He said the two gasification ships in Ain El-Sokhna port provide about 700m cubic feet per day from gas imports, from which the gas is transferred through the national grid to be distributed to consumers.

The official added noted plans to introduce a third gasification ship which would arrive at the SUMED port in Ain El-Sokhna by the end of 2016 to provide gas for the new power plants.

The gasification ship stores imported gas in a liquid state until it is to be converted to a gaseous state and introduced into the national distribution grid.

On the other hand, the EGAS official said the latest modifications to gas prices for high-consumption fertiliser factories is still a matter of discussion and no modifications will be approved until a solution is reached and agreed upon with all factories.

EGAS negotiated a new price equation pertaining to factories obtaining 50% of their needs from imported gas, with a price of $9 per a million thermal units with the rest of the gas being transferred according to the price agreed upon in the contracts.

The average price of imported gas that EGAS agreed to supply factories ranges from $8 to $9 per a million thermal units.

Local production is not expected to fulfil the electricity needs of homes, cars, and the industrial sector during the summer. To meet this shortfall, EGAS will begin importing gas in March 2016 and halt its gas output to high-consuming factories during the summer to provide for an expected rise in domestic consumption.

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Israeli Navy to Install Anti-Rocket Missiles on Patrol Boats to Defend Gas Rigs | Natural Gas Europe

December 20th, 2015 - The Israeli navy will install missiles on its patrol boats, in order to protect off shore natural gas infrastructure, reported Ha'aretz daily, a reliable Israeli daily.

Although the report hasn’t divulged on the missiles' operating system, the missiles themselves will be taken from the Iron Dome system, a mobile system capable of intercepting short aerial objects, including short range rockets. The missiles will be installed on Saar 5, an Israeli patrol boat.

The Iron Dome system was designed to intercept short range rockets such as those used by Hamas, the Palestinian group that controls Gaza Strip. Last week the chief of Israel's National Security Council, revealed that Hamas attempted to shoot at Israel's natural gas infrastructure, during operation Protective Edge, in the summer of 2014, but missed because the weapons were not sophisticated enough. However, he added that now Hamas is in possession of more sophisticated weapons.

The Iron Dome system was developed in the last few years by Israeli companies and its interception ability was proven during the 2014 Protective Edge operation, in which it is assumed that about 90% of all launches were successful, i.e. destroyed the rockets that were targeted at civilians and other targets.

The Iron Dome is a mobile short range anti rocket system and became operational in 2011. By late October 2014, the system had intercepted 1,200 rockets. However so far the Iron Dome was operated only from land and operating it from sea will set new challenges to its developers. Iron Dome installation on the patrol boats is a filling the gap step until the arrival of new battle ships, Saar 6 model, that are expected to enter service in the Israeli navy around 2019. Those boats will be equipped with Barak 8 system, an anti-missile system.

According to the report, the Israeli navy also plans to increase intelligence gathering in areas around the rigs and also to buy satellite hours from private satellite operators in order to enhance its intelligence gathering capabilities.

"We must ensure that the gas will continue to flow. There is no other option because there is no redundancy and there are no other energy reserves," a navy officer was quoted by Ha'aretz. The officer also supported the approval of the natural gas regulatory framework and said that the delay in its implementation already enabled the IDF to improve its preparations.

Ya'acov Zalel

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