Israel looks to new Arab allies to export gas in volatile region - FINANCIAL TIMES

Jerusalem, 13 November 2018
Mehul Srivastava 

Netanyahu seizes on natural gas to turn Egypt and Jordan into economic partners

When Yuval Steinitz was doing his military service in the Israeli army, Egypt was an enemy and Israel lived in fear of having its oil supplies choked off by Arab rivals. But in recent years, as Israel’s energy minister, Mr Steinitz, 56, found himself in hush-hush meetings with Egyptian officials.

On the agenda: Israel’s gas conundrum. Since the late 1990s, it has discovered huge natural gas reserves off its coast. The initial finds allowed the tiny nation to wean itself off some energy imports, but additional discoveries — which could fuel Israel for 50 years, according to some estimates — have unlocked the potential for exports. “This was unthinkable just a decade or two ago,” Mr Steinitz told the Financial Times.

His problem is getting the gas out of an often hostile neighbourhood. Israel’s long-term goal is to fuel energy-hungry nations in Europe. But in the meantime Mr Steinitz has helped smooth a lucrative place holder agreement with Egypt — which has had a peace treaty with Israel since 1979.

Cyprus missing out on a good gas deal, expert says - CYPRUS MAIL

October 16, 2018

Elias Hazou

Greek oil and gas company Energean, which has offered to pipe gas to Cyprus from its Israeli offshore leases at a highly competitive price, has responded to the energy minister who said the company does not have an export permit from the Israeli government and that therefore its proposal is invalid.

In a press release last Friday, Energean Oil & Gas Plc said it has submitted to the government a proposal “to supply Cyprus with natural gas as of the first quarter of 2021, without the investment cost burdening Cypriot taxpayers, and at a particularly competitive price”.

It added: “The company respects and complies with regulations and the regulatory framework in each country where it operates and, evidently, we have confirmed our capability to supply Cyprus with natural gas on the basis of the already-submitted offer.”

Energean was responding to energy minister, Giorgos Lakkotrypis, who a day earlier appeared to dismiss outright the company’s offer.

Are Eni and Total at the precipice of a giant gas discovery in Cyprus? - ENTERPRISE

Wednesday, 7 February 2018

Are Eni and Total at the precipice of a giant gas discovery in Cyprus? Reports have begun to emerge in the Israeli and Cypriot press this week that Eni and Total are on the brink of a major gas discovery at the Calypso reservoir in Block 6 off the coast in Cyprus. The find is reported to be 6-8.1 tcf, according to Israeli daily Globes. However, Cypriot Energy Minister Yiorgos Lakkotrypis said, “The findings are encouraging, but we need more time for analysis in order to provide final confirmation that there is a gas discovery. Meanwhile, I am unwilling to talk about quantities or any other matter.” The final results of the drilling are expected to be published within a few days. Lakkotrypis added that the geologic structure of the sea bottom at Calypso was similar to that of Egypt’s Zohr discovery. Globes notes that this doesn’t bode well for Israel’s Leviathan field, which remains without any contract to develop it.

Future challenges for East Med energy - CYPRUS MAIL

October 15, 2017

Charles Ellinas

An international conference on the future of energy in the eastern Mediterranean held in Nicosia earlier this month had three main themes: global energy developments and their impact on the East Med; the oil and gas industry and the prospects for the region, and energy transition and renewables in the East Med.

Impact of global energy developments

The keynote presentation was made by Professor Jonathan Stern of Oxford University’s Institute of Energy Studies, who is a renowned expert in the global energy and gas industries. It was a forceful but sobering presentation setting the global scene. His opening statement was that the ‘good old days’ of the global gas sector are over. Industry liberalisation, increasing competition, short-term trading, the relentless advance of renewables, energy efficiency and carbon reduction policies are impacting future energy demand. The future for gas is uncertain due to competition from low carbon energy and Paris Climate Agreement commitments.

The rate of growth of energy, power and gas demand in Europe has declined since its peak in 2010. Low prices also mean that companies want guarantees for projects for at least 15 years – otherwise they do not invest. Russian gas penetration of Europe is increasing and low prices make it difficult for others to compete.

US’ ExxonMobil set for 2018, Ankara warnings ignored - NEW EUROPE

AUGUST 22, 2017 09:12

Kostis Geropoulos

Italian energy major ENI’s bold announcement that it will start a drilling programme in November offshore Cyprus, which not only involves blocks 3 and 8, but also 6, demonstrates that it is not concerned about Turkish threats, Cyprus Natural Hydrocarbons Company [former] CEO Charles Ellinas told New Europe on August 21.

“In its own submissions to the government of Cyprus, ENI stated that it has examined in detail Cyprus’ rights to its EEZ (Exclusive Economic Zone), and it is satisfied on their legality on the basis of UNCLOS (The United Nations Convention on the Law of the Sea) and relevant international conventions. As a result, ENI and its partner (French energy major) Total are fully satisfied about their rights to explore and exploit block 6, disputed by Turkey, as well as other blocks,” Ellinas said.

Cyprus should seek maritime arbitration to nullify Turkish EEZ claims - CYPRUS MAIL

July 23, 2017

Elias Hazou

‘At the moment there’s the impression that the acreage is disputed’, expert says

CYPRUS should at least look into the possibility of seeking international arbitration regarding the boundaries of its and Turkey’s respective maritime rights around the island, before the situation potentially escalates, an energy analyst has told the Sunday Mail.

“The sooner the better,” said Charles Ellinas.

Things could get hairy next year, when ENI and Total aim to commence exploratory drilling for gas in their block 6 concession, to the southwest of the island, which Turkey claims partially falls within its own continental shelf.

Meantime the Turkish vessel Barbaros Hayreddin Pasa is currently conducting – ostensibly at least – seismic surveys in that very same offshore block.

With the dispute not going away – underscored by Turkey’s encroachments into Cyprus’ Exclusive Economic Zone this month – Nicosia must act, and fast.

Avenues which Cyprus could explore to resolve the matter include the International Court of Justice and the International Tribunal for the Law of the Sea.

With Turkey fuming, French Frigate patrols off Cyprus, energy drilling begins - NEW EUROPE

Turkish military search and rescue exercise with helicopters & ships
near Ammochostos, Cyprus, June 14, 2017

JULY 19, 2017, 19:49
Kostis Geropoulos

French-Italian consortium hunts energy, Cyprus ignores Ankara’s warnings

French Minister for Armed Forces Florence Parly visited Cyprus for the first time on July 17 as a consortium of France’s Total and Italy’s ENI begun drilling in Block 11 of the Mediterranean island’s Exclusive Economic Zone (EEZ), despite threats from neighbouring Turkey.

Parly was reportedly briefed by her Cypriot counterpart Christoforos Fokaides on Total’s drilling in Cyprus’ EEZ. Fokaides met Parly at the Zenon crisis management centre in Larnaca, ahead of her visit to the French Navy frigate Languedoc, which is currently operating in the East Med, Cyprus Mail reported.

Cyprus government spokesman Nicos Christodoulides said on July 17 the natural gas exploration was going as planned. “There is nothing causing concern or affecting our energy planning,” he said.

All eyes on Turkey as Total-ENI vessel readied to drill offshore Cyprus - NEW EUROPE

West Capella in Block 11, photo tweeted by Minister Lakkotrypis

July 12, 2017 14:26
Kostis Geropoulos

If Ankara provokes a hot incident in its attempt to block or stem the upcoming explorations in Cyprus’ EEZ, then it will have to confront not only Nicosia but the majority of the international community and the global energy community, a leading regional expert tells New Europe

ATHENS – As the West Capella drilling vessel, contracted by France’s Total in association with Italy’s ENI, is about to start drilling at Block 11 off Cyprus’ Exclusive Economic Zone (EEZ) only a few days after UN-sponsored reunification talks collapsed in Crans-Montana, there are concerns that Turkey may cause tensions in the area.

EMGC '17: Prospects for accelerating gas trade and regional energy cooperation - HYDROCARBON PROCESSING

March/15/2017
Adrienne Blume

NICOSIA—Gulf Publishing Company's Eastern Mediterranean Gas Conference (EMGC) 2017, the world's primary event for discussing the forces shaping gas industry development in the Eastern Med, continued on March 15.

Dr. Ir. A. J. (Guus) Berkhout, founder and director of the Centre for Global Socio-Economic Change.

Forecasting prosperity to predict energy demand. Founder and Director of the Centre for Global Socio-Economic Change, Dr. Ir. A. J. (Guus) Berkhout started the day with a keynote address on energy's role in economic development in Eastern Med countries.

‘Block 11 looks extremely promising’, gas expert says - CYPRUS MAIL

Cyprus' president Nicos Anastasiades (left) w/ European Commission's
president Jean-Claude Juncker

March 9, 2017
Elias Hazou

The partnership between French oil and gas major Total and Italy’s ENI in offshore Block 11 is an extremely significant development as it greatly increases the chances for a natural gas discovery in the licensed acreage, an energy analyst has told the Cyprus Mail.

“We have here a combination of Total’s technical know-how with ENI’s intimate knowledge of the proximate acreage after their discovery of the Zohr gas field in Egyptian waters,” Charles Ellinas said.

The expert confirmed reports that Block 11 is looking extremely promising.

To date, four or five targets have been identified there, he added.

Entry of major energy players not a game changer, expert says - CYPRUS MAIL

Rex Tillerson

December 26, 2016
Elias Hazou

WHEREAS there is no doubt the third hydrocarbons licensing round was a successful one – with the entry of US energy giant ExxonMobil – Cypriots would be well advised to manage any expectations of a financial bonanza, an energy analyst tells the Cyprus Mail.

“The economics of the eastern Mediterranean remain the same, regardless of the players,” said Charles Ellinas.

Profitability being the bottom line, and with gas prices still suppressed, discouraging development of natural gas fields at the moment, the entry of ExxonMobil is welcome, but not a game changer.

The same problems will persist unless there is a dramatic increase in gas prices, Ellinas said.

During 2016, the price of natural gas in European markets averaged at a low $4.5 per BTU.

Eastern Mediterranean Developments - ATLANTIC COUNCIL

Global Energy Debates and the Eastern Mediterranean, Chapter 6 -  Joint Publication by: PRIO Cyprus Centre, Friedrich Ebert Stiftung & Atlantic Council

Charles Ellinas

During the last 16 months the oil and gas sector has undergone dramatic change. The price downturn is quite serious but in the East Mediterranean we do not seem to worry about this. We carry on as if price is not an issue. However, sooner or later any East Med gas export plans will have to face up to this situation and respond to commercial realities if they are to move forward and reach and pass the point of final investment decision (FID). And it must be borne in mind that banks and the industry will only support projects with low risk and clear commercial returns.

At The Economist’s 11th Cyprus Summit on 3rd November 2015, Noble Energy’s representative said the company was still in the process of agreeing the Aphrodite development plan with Cyprus government and hoped to complete this during the next few months. There are export markets available in Egypt, partly for Egypt’s domestic market and partly for export to Europe as LNG. Following Egypt’s discovery of Zohr, many said that this has killed the market for others. But Noble Energy considers these reports to be greatly exaggerated. According to Noble there are still markets in Egypt for Cyprus gas and it is working with the government of Cyprus on these. The market in Cyprus is too small and hence not sufficient to support the development of Aphrodite. But gas will come to Cyprus once an export project has been identified.

Cyprus gas via Turkey the most viable option, experts say - CYPRUS MAIL

November 21, 2016
Elias Hazou

Transporting natural gas to Turkey from Israel and Cyprus seems to be under current market conditions the most viable option, but not without geopolitical risks, experts said on Monday at a conference titled ‘The Future of Eastern Mediterranean Gas’.

The conference, the fourth in a series on energy in the eastern Mediterranean, was organised by the Prio Cyprus Centre, in collaboration with the Atlantic Council, the Friedrich-Ebert-Stiftung in Cyprus and Istituto Affari Internazionali and Strata Insight.

Charles Ellinas, non-resident senior fellow with the Atlantic Council, said that in the long term the transport of natural gas through a floating LNG (FLNG) plant is a serious option, since options such as exporting gas to Europe through Egypt, through the mooted East Med pipeline or through Turkey, seem not to be viable because of low prices internationally.

US oil companies may benefit from stronger political support - NEW EUROPE

NOVEMBER 11, 2016, 20:49 
Kostis Geropoulos

ATHENS – The new US Administration of President Donald Trump is unlikely to facilitate the export of hydrocarbons from Israel, Cyprus and Greece but support for solution of the Cyprus problem will remain, top experts told New Europe.

“With regards to export of hydrocarbons from Israel, Cyprus and Greece I do not see any direct impact, but if prices stay low it will not help,” Charles Ellinas [former] CEO of Cyprus Natural Hydrocarbons Company told New Europe on November 10, adding that such exports are still challenged by low oil and gas prices in Europe and globally. “Israel’s plans to export gas to Turkey should not be affected – it is a local deal in which the US will have a role similar to now, i.e. supporting it,” he said.

Best hope for Israeli gas - Turkey, not European market - TREND NEWS AGENCY

2 November 2016 11:10 (UTC+04:00)

Leman Zeynalova

The recent talks between Israel, Greece, Italy and Cyprus on Israeli gas export to Europe
are largely political talks, Charles Ellinas, oil market expert, former executive president at Cyprus National Hydrocarbons Company (CNHC) told Trend Nov.2.

Such a pipeline can become commercially viable if gas prices in Europe double, to over $8 per mmBTU, which is not likely to happen in the foreseeable future, said the expert.

Touching upon the possibility of building a pipeline from Israel to Turkey, Ellinas pointed out that this pipeline is priority and is also commercially viable.

The only obstacle is that it is has to go through Cyprus, which could be easier with solution of the Cyprus problem, he added.

However, the expert said that there is also some resistance to the construction of such a pipeline both in Israel and in Turkey.

Cyprus revives LNG import plans - INTERFAX

Cyprus’s Vasilikos gas-fired power station(J&P Group)

28 October 2016
Verity Ratcliffe

Cyprus is preparing to launch an independent study into importing LNG as Nicosia looks to revive plans for an LNG purchase tender.

State-owned Natural Gas Public Co. (DEFA) has invited consultants to submit bids to carry out the research. Up to 10 bids are expected from companies including Gaffney, Cline & Associates, KPMG, Wood Mackenzie, DEP Levant Oil & Gas, DNVGL, Arntzen de Besche and Genesis Oil and Gas.

"The objective of the study is, based on the analysis of the various options of LNG supplies, to identify and propose an option/project, an appropriate process and a timetable for the supply of gas to Cyprus [as soon as possible] and before 2020," the tender documents say.

Israel-Turkish pipeline hinges on Cyprus issue solution - NEW EUROPE

OCTOBER 28, 2016 00:04 
Kostis Geropoulos

Gazprom strives to secure its market in Turkey, fighting against additional Azeri, Iranian, Kurdish or East Mediterranean gas.

ATHENS – The rapprochement between Tel Aviv and Ankara will give fresh impetus to a pipeline from Israel to Turkey, experts told New Europe in Athens on October 25.

During a meeting of Israel’s Energy Minister Yuval Steinitz and his Turkish counterpart Berat Albaryrak at the World Energy Council in Istanbul on October 13, Tel Aviv and Ankara agreed to examine the feasibility of the pipeline.

An energy union - IN CYPRUS / CYPRUS WEEKLY

October 22, 2016
By Charles Ellinas

Israel and Turkey agreed last week to open discussions and examine building a gas pipeline to pump Israeli gas from Leviathan to Turkey and from there to Europe.

The meeting last week between Israeli Energy Minister Yuval Steinitz and Turkish Energy Minister Berat Albayrak in Istanbul, was the highest-level official meeting since the two countries normalised ties in June. The process to normalise relations was strongly backed by the US.

The crisis between the two countries erupted after Israel stormed a Gaza-bound Turkish aid ship, the Mavi-Marmara, in 2010. Until that time, Turkey had been Israel’s key ally in the Muslim world.

In June this year the two countries finally agreed to normalise their relationship, with the return of their Ambassadors to their posts later in the year.

French gas giant Totally ready for 2017 - IN BUSINESS / CYPRUS WEEKLY

September 30, 2016

French gas giant Total has plans ready for exploration in the Exclusive Economic Zone in Cyprus for the period 2017-2018, which coincides with a push to reunite the island and maximise benefits from natural resources.

Total has drafted a detailed programme on four drills inside Block 11 of the Cyprus EEZ for the period 2017-2018, according to daily Phileleftheros.

The French company is “moving ahead with preparations for the initial drill which will require a drilling rig of the latest technology capable of reaching deep underwater.”

Phileleftheros added that drilling decisions were made a week ago and Total has opened bids already for subcontractors as well as infrastructure support at Limassol port.

FLNG for the East Med? - IN CYPRUS / CYPRUS WEEKLY

September 17, 2016, By Charles Ellinas

East Med has high gas potential but gas finds are deep-water and expensive to develop. On top of this, there are regional markets but with finite demand. As a result, there is an increasing need to export to global markets. This applies even more so to Cyprus. That’s where Floating LNG (FLNG) comes into the picture.

This was the key topic of a recent international conference in London, during which I made a presentation on potential developments in FLNG in the East Med.

Cyprus and Israel lack gas export infrastructure. They are also fast running out of export options. That’s why FLNG is coming back into the equation.