Israel presents Noble, Delek with monopoly compromise | Interfax

Israel presents Noble, Delek with monopoly compromise

By Staff reporter
Posted 19 February 2015 11:50 GMT

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David Gilo, the director general of Israel’s Antitrust Authority, has presented Delek Energy and Noble Energy with a compromise solution to break up their monopoly over the domestic market, financial daily Globes reported on Wednesday.

Under the proposal, Delek will sell its holdings in the Tamar, Karish and Tanin fields, and Isramco will be the sole marketer of the gas from the Tamar reservoir to Israeli customers, the newspaper said.

Leviathan gas will be sold under a separate marketing model under which Noble, Delek and Ratio Oil Exploration can keep their stakes in the field, but each will market their own gas to local customers.

Source: http://interfaxenergy.com/gasdaily/article/15320/israel-presents-noble-delek-with-monopoly-compromise

ENERGY: Cyprus and Egypt sign offshore gas and pipeline MoU | Financial Mirror

ENERGY: Cyprus and Egypt sign offshore gas and pipeline MoU

16 February, 2015

The Cypriot Minister of Energy and the Egyptian Minister of Petroleum have a signed a memorandum of understanding (MoU) in Cairo for both the upstream and downstream exploitation of output from the ‘Aphrodite’ offshore gasfield and possible liquefaction for export using existing plants in Egypt.

Following on their meeting in Nicosia on November 25, the Minister of Petroleum and Mineral Resources of Egypt, Sherif Ismail and the Minister of Energy, Commerce, Industry and Tourism of Cyprus, Yiorgos Lakkotrypis, signed, in the presence of the Egyptian Prime Minister Ibrahim Mahlab, a memorandum for cooperation in the field of oil and gas, an official announcement said on Monday. 

The announcement said that the MoU will, inter alia, facilitate the cooperation between the two countries in the development and exploitation of the Cypriot ‘Aphrodite’ gas field in block 12 of the Cyprus Exclusive Economic Zone, utilising gas infrastructure existing in Egypt for the mutual benefit of the two countries. 

In particular, the MoU authorises the Egyptian Natural Gas Holding Company (EGAS) and the Cyprus Hydrocarbons Company (CHC) Ltd to examine technical solutions for transporting natural gas, through a direct marine pipeline, from the Aphrodite field, operated by U.S. Noble Energy and its Israeli partners Delek Petroleum and Avner Drilling, to Egypt. 

“This will optimise the use of the gas infrastructure and achieve an added value for both Cyprus and Egypt. This undertaking will be carried out in cooperation with concerned stakeholders in upstream and liquefied natural gas (LNG) activities. The aim is to conclude an agreement within six months from the date of the signature of this memorandum of understanding,” the announcement said. 

This MoU is a significant step towards strengthening cooperation between Egypt and Cyprus in the field of oil and gas, which will further deepen the friendly relations between the two countries. 

Cyprus had initially signed an MoU with Noble and its Israeli partners to consider setting up a liquefaction plant on the island, but the estimated reserve quantities of about 3.5 trillion cubic feet would not be sufficient to justify such an output unit. Instead of a land-based LNG plant, Noble has also pondered about a floating LNG (FLNG) unit within its licensed Block 12 of the Cyprus EEZ.

Source: http://www.financialmirror.com/news-details.php?nid=33843

CYPRUS, EGYPT, ISRAEL AND GREECE LOOK TO IMPROVE REGIONAL SECURITY | Natural Gas Europe

February 16th, 2015

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CYPRUS, EGYPT, ISRAEL AND GREECE LOOK TO IMPROVE REGIONAL SECURITY

Cyprus plans joint military exercises with Israel, Greece and Egypt to improve regional security. Cyprus has suffered from the violation of its Exclusive Economic Zone by a Turkish seismic vessel sent by the Turks to conduct exploratory searches in Cyprus’ maritime zone. The NAVTEX announcing the offensive has led to the disruption of the UN peace talks aimed at reunifying the island of Cyprus divided since 1974.

Hopes that the natural gas finds off the island’s coast will be a catalyst for a settlement are now at their lowest. Turkish Cypriots advance that gas explorations initiated by the government of the Republic of Cyprus will only benefit the Greek two-third of the island, despite repeated statements by Cypriot officials that all revenues generated from gas production will benefit the totality of the island.

Texas-based Noble Energy made a significant discovery in Cyprus’ EEZ in 2011. The Aphrodite field, estimated at 3.6 to 6 Tcf, has not yet reached production stage as the government studies the optimal way of getting the hydrocarbon to market. Despite its complete dependence on gas imports to satisfy domestic demand, Cyprus’ need for the hydrocarbon is negligible and most of the gas found in its waters will be allocated for exports.

An original plan to build an onshore LNG terminal in the Vassilikos coastal site of Cyprus has been put on hold until further exploratory successes are made to justify the commercial viability of the endeavour. Cyprus is currently looking to develop its Aphrodite field with the possibility of exporting the gas to Egypt. Finding a customer would encourage the costs involved in the development of the field, domestic demand alone being too small to justify the investment.

Cyprus has also been considering importing gas from neighbouring Israel as an interim solution until the island reaches self-sufficiency. However, regulatory hurdles in Israel have threatened to delay production of the 21 Tcf Leviathan beyond the original 2018 deadline. A dispute between Noble Energy and Delek, and the Israeli competition regulator has yet to be resolved. The outcome is unclear but possible scenarios including breaking the Delek-Noble consortium and forcing the partners to sell their stakes in the field.

Meanwhile, Cyprus continues exploratory activities in its waters. Despite TOTAL’s (temporary?) withdrawal from the island, the ENI/KOGAS consortium pursues its search in Block 9 of the island’s EEZ. Successful discoveries would encourage further investments and widen the island’s options in terms of export possibilities. Tensions with Turkey will need to be reduced but it is far from certain that positive progress in the energy field will improve the security situation of the Eastern Mediterranean.

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

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