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.

Cypriot Unification Talks Carry Israeli-Turkish Pipeline Dream - VOA

UNSG Guterres (left), Cypriot president Anastasiades, March 2017

June 27, 2017 3:06 PM
Dorian Jones

Turkish and Greek Cypriot leaders are set to sit down Wednesday to once again seek to resolve the nearly five-decade-long division of the island. The success of the talks now carries with it potentially far reaching energy implications for the region, involving Turkey, Israel and the European Union.

Israel and Turkey are in talks to develop a major pipeline that would exploit the massive Leviathan gas reserves discovered off the Israel coast.

Turkish-Israeli pipeline deal on the way? - HURRIYET DAILY NEWS

April/29/2017

“We could have Israeli gas in Turkey in the next three to four years,” said Shaul Meridor, the Israeli Energy Ministry’s director general, at the eighth annual Atlantic Council Istanbul Summit.

The delegations have been engaged in very constructive talks in the last couple of months, Meridor says, noting that a deal between the two governments could occur soon, once the technical and commercial aspects of the pipeline project to transport Israeli gas to Europe via Turkey are agreed upon.

When the energy ministers of both countries met on the sidelines of the World Energy Congress in October 2016 – which also marked the first ministerial-level visit since a reconciliation deal following the Mavi Marmara incident of 2010 – they agreed to establish working dialogue to explore the possibilities of carrying Israeli gas from the Leviathan gas field to Turkey via an undersea pipeline. This proposed pipeline would then be connected to the Trans Anatolian Pipeline (TANAP) and thus reach European markets.

Is Noble Energy getting cold feet? - GLOBES

22 Feb, 2017 12:28Amiram Barkat

TEKMOR Note: See here Noble's press release about its decision to go ahead with the project.

Noble Energy is unwilling to take an investment decision until the gas agreement with Jordan is finalized.

The next milestone in the Israeli gas sector is scheduled for mid-2017; the partners in the Leviathan natural gas reservoir must produce a commitment to a $1.5 billion investment in developing the resource by then. According to the partners' interpretation, this amount includes the $1.2 billion that had already been invested in Leviathan before the current gas plan was formulated. If this is correct, then the milestone inserted in the plan is meaningless, because the developers have already gone far beyond that. Beyond that, one simple question arises: why has there been no official and binding decision to develop the reservoir?

European interest in Israeli gas deepens - GLOBES

18 Jan, 2017 18:33
Amiram Barkat

The Energy Ministry director general will meet counterparts from Italy, Greece, and Cyprus to discuss a gas pipeline from the Leviathan reservoir.
High-level contacts between Israel and European countries on laying a gas pipeline from the Leviathan natural gas reservoir are about to take place. Sources inform "Globes" that Ministry of National Infrastructure, Energy, and Water Resources director general Shaul Meridor will travel to Brussels next Monday to meet his counterparts from Italy, Greece, and Cyprus in the European Commission offices. The meeting is designed to pave the way for a summit between the four countries' energy ministers next month in Israel.

Delek: Talks with Union Fenosa continue - GLOBES

19 Dec, 2016 15:39
Nati Yefet

Delek has rubbished an Egyptian media report that UFG's partner ENI, instead of the Tamar partners, will export gas to the Al Shorouk liquefaction plant.

Delek Group Ltd's. (TASE: DLEKG) natural gas exploration and production units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) issued a clarification this morning, that talks continue with Union Fenosa Group (UFG) which co-owns a gas liquefaction plant in Egypt together with Italian company ENI. This clarification follows a report in Egypt's Daily News website that ENI, which owns 60% of the Al-Shorouk gas field (TEKMOR Note: Zohr field in the Shorouk concession, Rosneft 30%, BP 10%), is to lay a pipeline to the liquefaction facility and export 8.2 BCM of gas. The report would apparently undermine the possibility that the Tamar partners would export gas to the liquefaction facility.

The announcement said that the report in their 2015 annual statement about the signing of a binding letter of intent (LOI) on gas exports to the liquefaction facility, is still valid, and talks between the parties continue. "As for the media reports, the partners seek to clarify that contrary to the implications of these reports, and following clarifications received from UFG, the parties continue with ongoing negotiations aimed at reaching a binding agreement for natural gas supply from the Tamar project to UFG's existing liquefaction facilities in Egypt."

Israel and Turkey Seek to Shield Natural Gas Ties From Politics - BLOOMBERG

December 12, 2016 — 3:05 AM EST

Yaacov Benmeleh and David Wainer

• Governments working on deal that would provide such insurance
• Israel could pump gas to Turkey in 3 years: energy ministry

Israel and Turkey are working to eliminate a major obstacle to natural gas deals: their own fractious history.

The two governments are working on a framework for the export of Israeli natural gas to Turkey that would protect contracts between companies if diplomatic ties break down, Israeli Energy Ministry Director-General Shaul Meridor said in an interview in Jerusalem. With such a shield in place, gas could begin flowing from Israeli waters to Turkey as soon as 2019, he said.

“For banks to eventually finance such a project they will have to know that no matter what happens between the countries politically, the business side will be protected,” he said.

Israel’s Energy Director-General: ‘We’re Back In Business’ - HART ENERGY

Tuesday, December 6, 2016 - 4:23pm

Velda Addison 

HOUSTON—Home to massive gas discoveries such as the gigantic Leviathan Field and the nearby Tamar Field, which together hold more than 906 billion cubic meters (Bcm), or 32 trillion cubic feet (Tcf), of natural gas, Israel’s budding hydrocarbon scene could be poised to become the center of a natural gas hub.

That is, if oil and gas investors see the potential and are willing to put money into exploring, developing and producing hydrocarbons in the Mediterranean Sea.

This is exactly what Israeli energy officials hope will be the case as they showcase 24 Levant Basin blocks offered for exploration during the country’s first offshore bid round, which closes in March 2017.

With water depths ranging from 800 m to 1,800 m (2,625 ft to 5,906 ft), each block is up to 400 sq km (154 sq miles). Citing results from a study conducted by France-based Beicip-Franlab, officials say the “yet-to-find potential” in the Mesozoic and Tertiary reservoirs alone is 6.6 billion barrels of oil and 2,137 Bcm (75 Tcf) of gas.

The EU Takes A Serious Look at the Leviathan Giant Gas Field - PTJ (Pipeline Technology Journal)

Thu, 2016-11-10 10:31
Admir Celovic - Mark Iden

The European Commission has determined after authorizing a feasibility study on a natural gas pipeline from the Leviathan offshore gas field via Cyprus to Greece would cost about $5.7 billion.

This was reported by Shaul Meridor, Director General of the Israeli Ministry of Natural Infrastructures, Energy and Water Resources. Meridor met in Athens with his counterparts from Greece, Cyprus and Italy and a senior official from the EU Energy Commission. All meeting participants expressed the desire to carry on with the project and the European Commission has recognized the pipeline as a Project of Common Interest (PCI).

The length of the pipeline examined in the feasibility study would be 1,300 kilometers - 200 kilometers in deep waters from the Leviathan field to the Cypriot gas fields and Cyprus itself, 700 kilometers to Crete, and 400 kilometers to the Greek mainland. The pipeline's diameter would be either 24 or 32 inches in various sectors and it could supply 16 BCM annually.

Leviathan gas pipeline to Greece would cost $5.7b - GLOBES

27/10/2016, 09:43
Nati Yefet

The EU Commissioner, which financed a feasibility study, has recognized the pipeline as a Project of Common Interest.

A feasibility study conducted by IGI-Poseidon, which was commissioned by the EU Commissioner, has found that laying a natural gas pipeline from the Leviathan offshore gas field via Cyprus to Greece would cost about $5.7 billion. This was reported by the Ministry of Natural Infrastructures, Energy and Water Resources director general Shaul Meridor who met in Athens with his counterparts from Greece, Cyprus and Italy and a senior official from the EU Energy Commission.

All the participants in the meeting expressed support for the project and decided to continue moving ahead with it, despite the major complexity of laying such a pipeline in deep waters. The pipeline would convey natural gas from fields in both Israel and Cyprus and potential discoveries in Greece's economic waters. The EU has recognized the project as a Project of Common Interest (PCI) and consequently financed the feasibility study.

Israeli, Cypriot officials to meet for natural gas talks - ISRAEL HAYOM

Tuesday October 25, 2016Hezi Sternlicht

• Senior officials from energy ministries to try to finalize agreement on the development of shared gas fields Aphrodite and Yishai 

• Israeli official to fly to Athens on Thursday to discuss the building of tripartite pipeline to export gas from Israel.

Senior energy officials from Israel and Cyprus were scheduled to meet Tuesday to discuss the development of two natural gas fields, Aphrodite and Yishai, which lie on the maritime border between the two nations.

Shaul Meridor, the director general of Israel's National Infrastructure, Energy and Water Ministry, was to meet with his Cypriot counterpart, Stelios D. Himonas, the permanent secretary of Cyprus' Energy, Commerce, Industry and Tourism Ministry. The meeting is the latest effort to finalize an agreement that would pave the way for joint projects on those fields.

Lebanon to issue offshore gas exploration permits - GLOBES

18/07/2016, 18:50, Hedy Cohen

The Lebanese press reports that Lebanon will open its waters for new oil and gas exploration permits. One of the permits Lebanon intends to issue is still being contested by Israel.
In March 2013, Lebanon initiated a preliminary vetting process for gas companies which want to operate in the country. 12 international operators have passed this stage as well as 34 more non-operator firms. While Lebanon intended to provide ten offshore permits, the state's regulatory and political instability has led to delays with their issuing.

A source with connections in Lebanon's Ministry of Energy and Water told "Globes" that the discovery of Egypt's gas fields last year, as well as the Israel-Turkey reconciliation agreement (expected to promote a gas deal between the states), has led the ministry to push forward for an early publication of the permits during the last two weeks.

Steinitz says Israel will soon find ‘as much as four Leviathans’ worth of gas in new fields - THE JERUSALEM POST

Yuval Steinitz at the Jerusalem Post's Diplomatic Conference.
(photo credit:Courtesy)

By MICHELLE MALKA GROSSMAN \ 06.17.2016 | 11 Sivan, 5776

The next step, Steinitz said during a panel discussion, is to develop the natural gas market and integrate it into the larger geopolitical picture.
Although the past year has been challenging with setbacks in developing the Leviathan offshore gas reservoir, National Infrastructure, Energy and Water Minister Yuval Steinitz said Thursday that Israel was planning to develop new gas fields in the coming months.

The next step, he said during a panel discussion, is to develop the natural gas market and integrate it into the larger geopolitical picture.

Israel, Greece, Cyprus mull joint natural gas projects - GLOBES

The top officials from all three Ministries of Energy met to discuss potential - though highly unlikely energy ventures.

20/04/2016, Hedy Cohen

Ministry of Energy director-general Shaul Meridor met Wednesday with his counterparts from Cyprus and Greece to discuss potential cooperation opportunities in the energy sector. The session was a follow-up to a meeting held in the Cypriot capital of Nicosia.

The topics of discussion included the potential of natural gas in the Middle East, the possibility of exporting from the Israeli and Cypriot reservoirs, a natural gas pipeline to Greece, renewable energy, fuel alternatives, the integration of natural gas into public transportation, and the laying of a pipe to channel electricity between Israel and Europe.

Israel-Jordan gas pipeline to begin operating in 2017 - THE JERUSALEM POST / GLOBES

By HEDY COHEN/GLOBES, 03/11/2016

Israel Natural Gas Lines CEO Samuel Tordjman says pipeline in Dead Sea area will be operational next year.

The first natural gas pipeline to Jordan is scheduled to begin operating in 2017, Israel Natural Gas Lines CEO Samuel Tordjman announced Thursday. The pipeline, currently being constructed in the Sdom area by the Dead Sea, will supply gas from the Tamar reservoir to private customers in Jordan. A second pipeline to be built in the Beit Shean area is due to supply gas from the Leviathan reservoir to the Jordanian National Electric Power Company (NEPCO).

In February, the Tamar partners signed a letter of intent with private customers in Jordan to supply 1.8 BCM over 10 years. In September 2014, the Leviathan partners also signed a letter of intent to supply 45 BCM of gas to NEPCO over 15 years; the value of the contract is estimated at over $15 billion. The discussions of the gas plan in Israel, however, which have been taking place for a year, have stalled the negotiations between the two countries.

Netanyahu’s Support for the Gas Deal: A Leadership Crisis He Had to Win | Haaretz

The government ignored security arguments when negotiating with natural gas firms but dredged them up to bypass the antitrust chief. The following are three key issues.

Eytan Avriel Dec 29, 2015

Hats off to the organizations that have fought the government’s decision to give Delek Group and its U.S. partner Noble Energy a dominant position in the country’s natural gas industry.

And hats off to Israelis who keep fighting. Although Prime Minister Benjamin Netanyahu signed the deal, the debate is still going on, from High Court petitions to arguments in the press and on social media.

After all, the questions about what Israelis will reap from this miracle under the sea are only growing. Here are three.


The issue of the implementation team

Immediately after approving the deal, Energy Minister Yuval Steinitz appointed a team to implement it. The team includes, besides people from the Energy Ministry, officials from the Finance Ministry and National Economic Council, agencies that shaped the deal and led negotiations with the gas companies. They called the deal “the best option.”

The implementation-team idea is a good one. The public sector is bureaucratic and does not excel at carrying out decisions, so a team to keep things moving is a good idea. But this team, like the process that led to the deal, isn't up to snuff and is hard to understand.

First, the person appointed to head the team is the Energy Ministry’s director general, Shaul Meridor, who has never handled the gas issue because of possible conflicts of interest. His brother, Mattan Meridor, is a partner in the law firm representing the Noble-Delek gas monopoly.

Meridor, who specializes in antitrust and competition law, attended some of the talks between the monopoly and the government team that forged the compromise deal. Is it logical that a person blocked from crafting the deal because of possible conflicts of interest should head the team implementing it?

That’s just one problem. Israelis have learned about an obscure clause in the antitrust law, Article 52, via which Netanyahu as economy minister bypassed the antitrust commissioner’s decision urging more scrutiny. Netanyahu used the argument that the gas deal has significant political and security ramifications, not just economic.

The show this month at the Knesset Economic Affairs Committee has revolved around this issue. At the climax of the show, the prime minister told the committee that the state had invested hundreds of millions of shekels to provide security for the offshore gas platforms because they’re in range of Hamas rockets from Gaza and the gas affects our ties with Egypt, Greece, Cyprus and Turkey.

The prime minister declared that decisions on the gas market should take into account security and foreign relations. He appropriated the antitrust commissioner’s authority and signed the deal. So why didn’t the implementation team include representatives of the Defense Ministry, the Foreign Ministry, the National Security Council and the military, which has to defend the gas platforms?

And why didn’t the team include members of the Antitrust Authority and the Electricity Authority, agencies responsible for the economy? Put a slightly different way, why does it appear the only interest directing the government is the gas monopoly’s economic interest?

Meanwhile, there’s a worrisome question the High Court might raise when it hears the petitions against the deal. If security and diplomatic considerations are so important, whey didn’t defense and foreign ministry officials work on the deal and help negotiate with the gas companies?

If there’s a fear that defense or diplomatic considerations were neglected, is the deal prudent? For example, the public never received a report on the costs of defending the platforms, or on whether the authorities discussed with the gas companies who would pay for the platforms’ defense.


The issue of global gas prices

The government uses security arguments when it’s convenient. It ignores them when negotiating with gas companies but dredges them up to bypass the Antitrust Authority. Similarly, the government uses global gas prices or ignores them based on its political needs.

Last summer, every time Steinitz sought to convince his interlocutors about the gas deal’s low price, he showed a table he said proved that Israel’s gas price would be low relative to most developed countries. But Steinitz used 2014 prices, while the market had plummeted since then. Only under the pressure of public protest did the gas deal lower the ceiling on new contracts.

But global gas prices have continued to collapse; it’s now questionable whether developing the gas fields yet to be developed will be profitable – basically all the fields besides Tamar, from which gas has been flowing for two years. On Thursday, for example, the Energy Ministry awarded concession documents for the Karish and Tanin reserves, but given current prices it’s highly doubtful whether it’s worth developing these two small fields.

This is important because the gas deal is based on the principle that the Karish-Tanin reserves, which Delek and Noble are required to sell within 14 months, are the ones creating competition and price reductions in the Israeli market. If it’s not profitable to develop them, no competition will ever develop.

According to experts, as long as gas prices don’t recover, the government will be forced to offer billions of shekels in subsidies to the Karish-Tanin shareholders to make it worth their while. Otherwise the fields won’t be developed.

This subsidy can take the form of a huge development grant, a high enough long-term guaranteed price, or a combination of the two. Are these low prices in global markets, which create the need for an enormous subsidy to the concession holders, not enough to reopen the debate on the gas deal, or at least hold a public discussion?


The issue of Netanyahu’s resolve

Of course, the prime minister didn’t show any interest in the gas market until a year ago, just as he didn’t show any interest in key economic issues in recent years. It’s no coincidence.

This decade, Netanyahu has portrayed himself as a responsible adult on security and foreign policy, and left the irksome socioeconomic issues to ministers and bureaucrats.

Netanyahu may have met Noble Energy’s chiefs when they visited Israel, sometimes with Delek’s controlling shareholder, Yitzhak Tshuva, but he didn’t help with the work and contacts in drafting the deal.

But a year ago, when the antitrust commissioner decided to do his job, Netanyahu turned into the deal’s main marketer; he even took the unusual step of taking over from his economy minister. So why did Netanyahu suddenly return to economic affairs, and why in the complex field of gas?

According to one theory, he was pressured by the United States, and we know of at least one letter from casino magnate Sheldon Adelson, the owner of the Israel Hayom newspaper who supports Netanyahu unconditionally. Government insiders and lobbyists for former U.S. President Bill Clinton also applied pressure.

Another theory suggests that Netanyahu feared that postponing development of the gas fields would lead to an investigative committee on “the great gas disaster,” as his enemies would label it, blaming him. There are two theories on this.

One is that Netanyahu could speed up the deal and development, even to the benefit of the gas companies. Second, he could blame delays on his political opponents – leftists, communists and protesters, whose real goal is to dethrone him.

It’s very likely that neither of these theories is right and that Netanyahu simply found himself in a leadership crisis he felt he had to win. Politicians on the sidelines say Netanyahu’s involvement shifted after Steinitz, who enjoys a rare open door to the prime minister, entered the Energy Ministry.

Steinitz recruited Netanyahu to help market the deal. The prime minister was armed with slogans. He declared that “when I want something, I usually get it.” And from there he had no choice but to continue until the deal was approved.

Which version is correct? We have no answer, but the question still keeps many people busy.

Eytan Avriel, Haaretz Contributor

SOURCE

Steinitz encourages Eni to invest in Karish and Tanin | Jerusalem Post

By SHARON UDASIN \

10/29/2015

Steinitz, along with ministry director-general Shaul Meridor, met with Eni CEO Claudio Descalzi, to discuss various opportunities available in the Israeli gas sector.

Energy and Water Minister Yuval Steinitz and Eni CEO Claudio Descalzi meeting Thursday at the Energy Ministry in Jerusalem. (photo credit:COURTESY NATIONAL INFRASTRUCTURES, ENERGY AND WATER MINISTERY)

In a meeting with the CEO of Italian energy giant Eni in Jerusalem on Thursday, National Infrastructure, Energy and Water Minister Yuval Steinitz suggested that the firm consider investing in two yet-to-be-developed Israeli gas reservoirs, Karish and Tanin.

Steinitz, along with ministry director-general Shaul Meridor, met with Eni CEO Claudio Descalzi, to discuss various opportunities available in the Israeli gas sector. While encouraging the Italian company to think about investing in Karish and Tanin, the minister also encouraged the firm to weigh the idea of exploring for new reservoirs in Israel's economic waters, his office said.

Assuming Israel's disputed natural gas outline – a long negotiated settlement between the government and the country's gas companies – is implemented, the Delek Group and Noble Energy will be required to sell the Karish and Tanin reservoirs to a third party.

While Eni is not yet involved in the Israeli gas sector, the company is no stranger to Eastern Mediterranean hydrocarbons.

Last month, the Italian firm announced that it had identified the Mediterranean’s largest known gas field off the Egyptian coast, the 849-billion-cubic-meter) Zohr field. If the estimates prove correct, the field would be significantly larger than the approximately 621 b.cu.m. Leviathan, Israel’s biggest.

During an exclusive interview with The Jerusalem Post on Monday, Steinitz suggested that the upcoming Eni visit might be “further testimony that international energy companies are interested in Israel” as part of their overall interest in the eastern Mediterranean basin.

“It’s quite clear that there might be very close cooperation between Israel, Egypt, Cyprus, Jordan and, maybe also in the future, Greece and Turkey,” he said. “If you want to be part of it, you have to be involved also somehow in Israel.”

At Thursday's meeting, Meridor delivered a presentation for Eni company executives indicating the estimated potential for discovery of large natural gas fields in Israel's economic waters, as well as the advantages of regional cooperation, the Energy Ministry said. The meeting participants discussed the regional gas markets, as well as possibilities to connect gas discoveries in Israel, Egypt and Cyprus, for potential joint export to the Western European market, the ministry added.  

Source: http://www.jpost.com/Business-and-Innovation/Steinitz-encourages-Eni-to-invest-in-Karish-and-Tanin-430394