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September 3, 2015 / 19 Elul, 5775
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Posts Tagged ‘Natural gas’

Israeli Cabinet Approves Gas Deal With Noble Energy, Delek Ltd.

Sunday, August 16th, 2015

Government ministers passed the long-awaited, controversial gas deal on Sunday afternoon, giving the Noble Energy and Delek Ltd. consortium the rights to the large gas fields they had discovered and begun to develop beneath the waters of the Mediterranean – while giving Israeli citizens a future income of hundreds of billions of shekels in the process.

“This money will benefit education, health, social welfare and other national needs,” Prime Minister Binyamin Netanyahu said at the start of the weekly cabinet meeting.

“I would like to commend the work done by Minister Steinitz’s team which has led to a very significant reduction in the price the state will pay for gas and to other changes that will greatly improve the outline.

“I am not impressed by populism – to me it is only populism, even though people could possibly believe in what they are saying, but the country needs gas. Gas resources in our region will be developed, unfortunately, either way, and we need to see to it that our resources work at full capacity.

“We need to extract the gas from the sea,” Netanyahu went on.

“This decision is an important milestone. We are overcoming the obstacles step by step. This process will not be stopped,” he said, making an oblique reference to the myriad attempts by various groups to stymie the agreement that was finally approved.

“The gas will be extracted from the bottom of the sea and will reach Israeli citizens, Israeli industry and the Israeli economy – for the benefit of the citizens of Israel.

“Every objective test proves this outline is a significant improvement over the existing situation. But one more thing must be understood – it cannot be stopped.

“When the right thing needs to be done, and it is so crucial to Israel’s economy and strategic situation, that thing will not be stopped. They will look for another way to delay, another excuse, another reason – and that will not work.

This outline will pass one way or another, and it is about time that it does. The true interests of the State of Israel require the passage of this outline as quickly as possible.”

Negotiations between the government and the consortium comprised of Texas-based Noble Energy and the Israeli company Dekel Group Ltd. have been dragging on for months.

Israel’s Antitrust Authority last year decided the consortium could not continue operations as the sole owners and operators of the massive Leviathan gas field, and the somewhat smaller but also large Tamar gas field – both of which were discovered and have been developed at considerable expense by the group.

Gas has already been produced from the Tamar field since 2013. Leviathan is considered the largest discovery in the world in the past decade – and certainly the largest field in the Mediterranean.

Negotiations over how pricing will be set for gas in the domestic market and the prices and percentage of reserves to be exported had taken place for months between the government and the group – which has pointed out that without being able to recoup its investment and also to be able to make a profit, there is little point to continuing its operations in the area.

Antitrust Commissioner David Gilo threatened to resign in May over his opposition to what he insisted was the group’s monopoly over the Tamar and Leviathan fields.

The gas deal negotiated with the government this past week allows Delek Group – owned by Yitzchak Tshuva – to sell its holdings in the Tamar field, and also two smaller fields, Karish and Tanin, within six years. Noble Energy will gradually reduce its own holdings in Tamar to a maximum of 25 percent within six years as well. Prices for natural gas will be regulated by the government within that same six-year period as well.

 

Senior Opposition Leader Attacks Netanyahu’s New Gas Deal

Thursday, August 13th, 2015

(JNi.media) Opposition Zionist Camp (Labor) MK Shelly Yachimovich on Thursday attacked economic ministers Kahlon and Deri, whom she said should have prevented the advancement of the Israeli government’s new offshore gas agreement with several energy companies, including Delek and Noble Energey.

Prime Minister Benjamin Netanyahu and Energy Minister Yuval Steinitz introduced the outline that was obtained Wednesday night with the gas companies over the sale of offshore gas to the Israeli market.

In an interview on Army Radio, Yachimovich said: “I say to both Finance Minister Kahlon and Economy Minister Deri — I’m disappointed in you. You have betrayed the public’s trust.”

She accused the two ministers of having earned their tickets into politics during the last election campaign on social and economic issues, and then reneging on their voters.

Yigal Landau, CEO of Ratio Energy that owns 15% of the Leviathan offshore field, said that if the outline is now rescinded by the legislator, there would be serious consequences for the Israeli market as a result.

“This does not mean that Noble Energy (of Houston, Texas) will walk away from such promising property,” Landau explained, adding: “The story is very simple — it would become impossible to raise and invest the necessary billions without which we will continue to ramble on, but the gas will stays at the bottom of the sea.”

According to the agreement reached, the base price per unit will be between $4.7 and $5.5, linked to the electricity production components’ costs. The outline will be brought to the cabinet for approval on Sunday.

“I thank this team for reaching an agreement that will earn the citizens of Israel hundreds of billions of shekels in the coming years,” Prime Minister Netanyahu said Thursday afternoon, adding, “This money will be used for health, education and welfare and therefore it will help us to lower the cost of living.”

Energy Minister Yuval Steinitz said: “With the approval of the outline, we will start moving forward the development of Leviathan, Karish and Tannin, creating competition and dismantling the [energy] monopoly.”

“We have indeed added several changes to the outline in the areas of prices, milestones for the development of Leviathan and certain changes in the article dealing with [the project’s] stability,” Steinitz explained.

Israel Reaches Gas Deal with Noble Energy, Delek Ltd. Group

Thursday, August 13th, 2015

Prime Minister Binyamin Netanyahu announced Thursday the government has reached an agreement with developers of the nation’s largest natural gas field, Leviathan.

According to the agreement, there will be a ceiling on future sales to domestic firms and the consortium has committed to completing development of the gas field by 2020. It will be brought to the Cabinet for a vote on Sunday.

The agreement follows nearly a year of wrangling between regulatory agencies and the energy consortium between Texas-based Noble Energy, in which U.S. Secretary of State John Kerry also owns shares, and Israel’s Delek Ltd.

The problems began when Antitrust Authority director-general Prof. David Gilo ruled last December that the gas sector must be restructured. The Authority accused the Noble Energy – Delek Ltd. group of forming an illegal monopoly, raising red flags for others who called on the state to nationalize its gas reserves.

As a result of the regulatory quagmire that followed, numerous talks that were in process with other countries stalled – and then stopped entirely – as other firms lost patience with Israeli bureaucratic snarls.

Deals that were pending with companies in Egypt, Spain and other countries are now questionable, placing what might otherwise have been a healthy new market for Israeli natural gas possibly on indefinite hold.

As the energy group pointed out to the government at the time, unless the companies who initially discovered the fields can recover their investment and also make a profit from their work, there will be no reason for them to continue to drill or explore further.

Natural Gas Discovered in Egypt’s Nile Delta; Will Israeli Gas Still Be Needed?

Wednesday, July 22nd, 2015

Natural gas waits for no bureaucracy, and consumers clamor for energy no matter what. Cairo cannot wait for Jerusalem to untangle its political squabbling and eternal red tape.

Instead, Italian energy company Eni was given the green light to search for more gas off Egypt’s Mediterranean coast, and along the Nile, according to UPI Business News.

This week, the company announced its efforts have met with success.

Italian energy company Eni said in a statement to media, “Preliminary estimates of the discovery account for a potential of 530 billion cubic feet of gas in place with upside, plus associated condensates.”

The firm signed two off-shore deep-water Mediterranean exploration agreements in January after a 2013 auction held by Cairo. The exploration follows a $5 billion framework agreement signed in March to develop Egypt’s oil and gas reserves.

The new reservoir was found in the Nooros exploration prospect in the Abu Madi West license area, about 75 miles northeast of Alexandria, according to the report. The discovery is emblematic of the company’s strategy to “focus on Egyptian assets close to existing infrastructure and with high resource potential,” Eni said in its statement.

The new discovery will go into production by September, using nearby existing gas treatment facilities, UPI reported. Eni has been operating in Egypt since 1954. The company currently has an equity production of some 210,000 barrels of oil equivalent per day.

One month ago, Emirati energy firm Dana Gas also announced plans to launch a new drilling campaign in Egypt. Under the deal, Dana will have the right to sell the government’s share of the reserves.

Israeli Energy Exports to Egypt As far back as April 2014, Israel and Egypt have been discussing a deal to export Israel’s natural gas to Cairo. Deals were already signed by Israel with Jordan and the Palestinian Authority despite the diplomatic friction with the latter.

This past February, the Noble Energy-Delek Group which owns the mammoth Israeli Leviathan gas field sent a delegation to Cairo to discuss Israeli gas export to Egypt from the offshore Tamar gas field. The gas would flow to Egypt’s Damietta LNG (liquified natural gas) plant, according to Egyptian oil ministry sources who spoke with Reuters.

The Egyptian government finalized a long-delayed deal for an LNG import terminal and has already reached an agreement to import gas from Algeria. Talks between Cairo and Russia are continuing.

Egypt is also negotiating for gas imports from the Aphrodite reservoir in Block 12 of Cyprus. The island nation recently nixed a bid to import gas from Israel’s Leviathan field for its own domestic use, due to the ongoing snarl of red tape that has been tying up industrial progress on Leviathan in general.

Noble-Delek Talks with BG in Egypt Noble-Delek group, meanwhile, is doing its best to carry on despite the Israeli penchant for bureaucracy. The group remains in talks with Britain’s British Gas (BG) Group that runs one of Egypt’s LNG plants, as well as with the Egyptian Dolphinus Group.

The consortium spent most of last year discussing the deal to build the $2.2 billion 10 billion cubic meter (bcm) sub-sea pipeline to link up with the BG facility, to be completed by 2023.

The group also signed a letter of intent with BG that states “if Leviathan is not developed on schedule, Aphrodite will supply them with the gas they need,” according to an industry source. A similar letter of intent to sell 2.5 b.cu.m. annually to Dolphinus was signed several months ago, using the Tamar field as the source for the gas. The partners said at the time the gas could flow for private industry within 2015.

Millionaire Geologist Langotsky to Knesset Committee: Don’t Sell Offshore Gas to Egypt – Are You Mad?

Wednesday, July 8th, 2015

(JNi.media) The geologist behind Israel’s offshore natural gas field discoveries, Yossi Langotsky, told the Knesset Economic Committee on Monday, July 6, 2105, that “it is forbidden to export gas from the Tamar [gas field] to Egypt before the Leviathan [field] is connected —are you mad?”

The committee is reviewing the government’s proposal on a deal with the gas producers. The Knesset appears split between those urging the signing of a mediocre deal, giving the producers some advantages, but at the same time ending the 5-year delay in getting the off-shore energy over to Israel—and those who insist the gas producers could make a better offer that would result in significantly reducing the average Israeli’s energy costs.

Langotsky conceded that “all the security experts have decided that, for security reasons, we should export the gas to Egypt.”

“But it is stupidity, and national irresponsibility,” he protested, citing Former Shell president John Hofmeister, who warned in a Globes interview in June that “for the sake of Israel’s security, it should keep the natural gas it has found in the country, and convert everything it can to operate on gas.”

Hofmeister cautioned further: “Israel has many enemies and no oil. What will happen if an embargo imposed on it? If you think someone will come to the rescue, think again.”

Langotsky told the committee that the gas companies “are inherently thuggish. They want to maximize profits, it is their goal. But the state of Israel? Are you stupid? If, God forbid, something should happen to the Tamar field, or the pipe—sure, there will be a commission of inquiry to decide who’s at fault, but what good would it do us? ”

Langotsky, who for more than 10 years has been the driving force behind the off shore gas project, has been drilling the Promised Land for more than 40 years. And he knows all about thuggish gas companies — he spent several years fighting in arbitration to finally get his share in the discovery, in late 2011, about $100 million, give or take.

Tel Aviv Crowd Protests Israeli Government Gas Deal

Sunday, June 28th, 2015

You know that summer has truly returned in Israel when thousands gather in Tel Aviv to protest consumer issues.

On Saturday night, the heat was on with a demonstration against the government’s latest deal to allow the Noble Energy – Delek Ltd. Group to move ahead with its development of Israel’s offshore gas fields.

Mor Gilboa, director of the Green Course environmental group and one of the organizers of the protest, contended that the deal “leaves us with exaggerated and outrageous natural gas prices that will not contribute to lowering the cost of living, to development of a strong local industry, to development of industry in the periphery, to reducing pollution.”

Zionist Union MK Professor Yossi Yona, a member of the opposition faction, added, “The current plan does not serve the public interest. [It] concentrates economic power in the hands of interested parties, among them foreign bodies, which means a strategic threat to Israel’s sovereignty.”

But on Friday before the protest, Prime Minister Binyamin Netanyahu denied allegations he was aiding and abetting the group in retaining power as a monopoly. Rather, he said, he was working to ensure the deal would bring prosperity to Israelis.

“I work for you, for the security of Israel and the welfare of all of its citizens,” Netanyahu wrote in a post on his Facebook page. He vowed in the post to keep his campaign promise to lower the cost of living using the country’s natural resources – including the natural gas that would come from the deal being negotiated with the group responsible for discovering and developing the Leviathan, Tamar and other gas fields in Israel’s Mediterranean waters.

Having discovered and begun the expensive process of developing the gas reservoirs, however, the two firms – Texas-based Noble Energy, and Israel-based Delek – have said they need to see a worthwhile return on the investment in order to continue the process.

The group was targeted last year by the Israeli Antitrust Authority for holding a monopoly on natural gas development in Israel, paralyzing the energy industry.

After months of uncertainty, Israel’s political-security cabinet put an end to the haggling on Thursday, unanimously approving a new compromise deal to allow the group to advance development of the fields.

The deal will allow the group to retain control over Leviathan, the world’s largest offshore discovery of natural gas in the past decade, among other concessions.

US Secy of State Kerry is Shareholder in Noble Energy’s Israeli Gas Group

Thursday, June 25th, 2015

An emerging compromise between the government and the natural gas group that discovered Israel’s offshore reservoirs is being discussed by the political-security cabinet Thursday (June 25) just as news is revealed the U.S. Secretary of State John Kerry is one of the shareholders in Noble Energy.

In a 2013 declaration of assets published on opensecrets.org, Kerry’s shares in Noble Energy totaled an estimated $500,000 to $1 million.

The revelation comes as the cabinet mulls a compromise that would eliminate the need to break up the energy group formed by Noble Energy and Delek, Ltd.

Also on the table is the issue of what will happen with gas agreements Israel has with customers in Egypt if this issue is not sorted out quickly. A regulatory quagmire has stalled the process of setting up a pipeline to supply the gas from Leviathan to the British Gas liquefaction facility at Idku, Egypt.

Last June, the Leviathan partners had signed a letter of intent with BG in a $30 billion deal to supply 105 BCM of gas to the facility for 15 years. One sixth of the reservoir’s gas field would be exported in the deal, which is designed to make its development worthwhile.

In May 2014, the Tamar partners had signed a letter of intent with Spanish company Union Fenosa, which has a gas liquefaction facility in Damietta, Egypt. The Tamar group would supply the facility in Damietta with 70 BCM over 15 years, a deal worth nearly $20 billion. Union Fenosa Fenosa would pay for a gas pipeline to connect the Tamar reservoir to the Egyptian facility.

But Israel’s infamous snarl of political red tape got in the way, and everything came to a halt.

Last December, Israel Antitrust Authority director-general Prof. David Gilo ruled the gas sector must be restructured. Israel’s Antitrust Authority accused the Noble Energy – Delek Ltd. group of forming an illegal monopoly, raising red flags for others who called on the state to nationalize its gas reserves.

As a result of the regulatory quagmire, negotiations with Union Fenosa stalled – and then stopped. A senior company executive told Globes the firm has continued to hold talks with the Tamar group, but said “the situation between us and the Tamar partners is complicated and difficult. The negotiations between us have reached an impasse.”

Since Egypt does not have infinite patience or time to wait for gas to supply its local economy, it is now exploring other options. According to a report by Ernst & Young, it appears likely that Royal Dutch Shell will sell gas to the British Gas liquefaction facility in Idku. Another possible option is the Aphrodite reservoir in Cyprus.

Likewise, Jordan – which also is in process of negotiating a contract to import gas from Israel – has no time to waste in obtaining affordable natural gas for her citizens. She, too, is now seeking other alternatives thanks to Israeli red tape and political games. One possibility under discussion is the Gaza marine reservoir.

If that happens, Israel’s nascent gas export industry will drown.

Last December (2014), Kerry spoke with Prime Minister Benjamin Netanyahu in an effort to help resolve the issue. At the time, State Department spokesman Jeff Rathke said in a statement, “We continue to engage and we support all parties to move forward with the natural gas deal signed between Noble Energy and entities in Jordan and Egypt. We strongly believe that these deals would enhance energy security in the region.”

Since that time, Netanyahu appointed National Economic Council chairman Eugene Kandel to try to reach a compromise solution.

The energy group has been negotiating with the government ever since. The group hopes to continue operating as is, pointing out that unless the companies can make a profit, there will be no reason for them to explore or drill.

Printed from: http://www.jewishpress.com/news/breaking-news/us-secy-of-state-john-kerry-is-helpful-shareholder-in-noble-energy/2015/06/25/

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