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June 30, 2015 / 13 Tammuz, 5775
At a Glance

Posts Tagged ‘Natural gas’

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.

Terrorists Blow Up Gas Pipeline in Sinai.

Sunday, May 31st, 2015

Unidentified terrorists blew up the natural gas pipeline in the Sinai once again on Sunday morning, cutting off supplies to factories.

The Islamic State ISIS) and ISIS-linked terrorists have made inroads in the Sinai, where the Egyptian regime has lost hundreds of soldiers and policemen in failed attempts to maintain stability in the region.

Egyptian media have reported that the ISIS branch in the Sinai “threatened to strike the Eilat Port, following coordination with Islamic State’s wing in Gaza,” where Hamas is trying to retain control.

The Islamic State also has made inroads in Asia as its threat to expand its radical Islamic terrorist empire becomes more real.

Sinai Bedouin and  the Egyptian government never have been on good terms with each other, but since the fall of Hosni Mubarak, accelerated with President Barack Obama’s support of the Arab Spring rebellion in 2012, terrorists have staked out most of the peninsula.

President Barack Obama might remain in the White House long enough to wish for the days of Mubarak.

EMG Protesting Tamar ‘Reverse Flow’ To Egypt Story, Says Quoted Costs Unrealistic

Monday, March 23rd, 2015

Published on Jewish Business News

The attorneys for East Mediterranean Gas SA (EMG) have sent a stern letter of protest to the Tamar natural gas reservoir owners—Noble Energy Mediterranean Ltd., Isramco Negev 2 Limited Partnership, Dor Gas Exploration Limited Partnership, Avner Oil Exploration Limited Partnership, Delek Drilling Limited Partnership—and to the press, protesting the publication of the Tamar reservoir partners agreements with Dolphinus Holdings Limited on the supply of gas to Egypt through EMG’s pipeline.

The attorney, Niv Sever, states that EMG was “surprised, once again, to read in the press about an agreement assuming the use of its pipeline for ‘reverse flow’ of gas between the Israeli Tamar Reservoir partners and Dolphinus Holdings Limited.”

In no uncertain words and in fluent Lawyerese, the Tamar partners, as well as the press, are warned that “EMG strongly protests the repeated unauthorized use of its name, targeted, so it seems, to capitalize on its assets.”

Apparently, EMG, despite its being the owner and operator of the gas pieline whose flow is to be reversed under the new deal, “is not a party to the reported deal and was not included in such negotiations. To avoid any doubt, there are no discussions held between EMG and Dolphinus on such a transaction and there have been no negotiations held in the past.”

Sever adds that, even if his client, EMG, were to permit this unauthorized use of their pipeline, “the reported up-front costs of such an operation are unrealistic for a pipeline that has been out of operation for several years.”

Apparently, when a pipeline is dipped in seawater for several years unattended, you can’t just turn it on and expect it to start reverse flowing stuff.

Or, as Sever puts it: “future operation to transport the reported interruptible quantities of gas for the reported duration would not be economical as far as EMG is concerned.”

“As you must be aware, Egypt has often been reported to impose three determinants for any reverse flow deal,” Sever continues, “approval of the Egyptian government, creation of added value for Egypt, and resolution of the pending international arbitration cases between EMG and its shareholders and Egypt.”

Alas, EMG’s attorney explains, “the positions taken by Egypt in those cases to date, as well as existing Egyptian law restrictions, preclude, at present, any agreement by EMG to contract use of its pipeline for reverse flow on any terms.”

Tamar Group To Sell Gas To Egypt Through Same Old Pipeline Built For Gas Exports To Israel

Thursday, March 19th, 2015

Published by Jewish Business News

A consortium of private, industrial, and commercial Egyptian companies will buy at least $1.2 billion of natural gas from Israel’s offshore Tamar field, through the very same pipeline Egypt had used to send gas to Israel.

On Wednesday, the Tamar partners announced a seven-year deal with Dolphinus Holdings, with a minimum 5 billion cubic meters of natural gas to be sold in the first three years.

But Reuters cites an energy source in Israel who said the deal is likely to be more than three times higher, as Egypt has been facing an energy crisis.

The gas will run through the underwater pipeline constructed almost 10 ago by East Mediterranean Gas (EMG), which executed the Egyptian-Israeli natural gas deal killed by the President Morsi government, and attacks on the pipeline by Salafi terrorists in the Sinai.

A lot of water ran through the River Nile since.

Texas-based Noble Energy is the field’s operator.

Chairman of Delek Drilling Yossi Abu, said the deal highlights Israel role as “an energy anchor for countries in the region” and that the deal will “radically change Israel’s geopolitical status.”

The Dolphinus deal is subject to regulatory and other approvals in Israel, Egypt and from the East Mediterranean Gas Company (EMG).

Islamists Help Israeli Exports and Blow Up Egyptian Gas Pipeline

Tuesday, December 23rd, 2014

Islamists blew up Egypt’s natural gas pipeline in northern Sinai Tuesday morning.

All roads to the area have been closed.

The “Champions of Israel,” known in Arabic as Ansar Beit al-Maqdis, previous has claimed responsibility for numerous bombings and attacks on Egyptian forces and has pledged its allegiance to the ISIS.

Every time the terrorists blow up the Egyptian gas pipeline, it benefits Israel, a more dependable source for natural gas that is being pumped from off-short energy fields discovered in recent years.

However, Israeli authorities still can’t make up their minds over an agreement what Israel’s Delek Group and its partner Noble Energy, based in the United States, can buy the Leviathan off-short energy field.

Anti-trust officials said Tuesday morning they told representatives of Delek and Noble they are ”considering” whether the purchase establishes them as an illegal cartel.

Israel to Export Gas to Egypt

Sunday, October 19th, 2014

The consortium that owns the huge off-shore Tamar natural gas field has signed a seven-year memorandum of understanding with the Egyptian Dolphinus Holdings to export of up to 2.5 billion cubic meters of gas to private Egyptian customers, Globes reported.

The deal is in addition to other sales by the owners of the Tamar and the Leviathan energy fields that have turned Israel into an energy exporter. Previously, Israel was dependent on Egypt for natural gas and had signed a long-term agreement with the regime of Hosni Mubarak. During and after the revolution that ended with his ouster and subsequent arrest and conviction for corruption.

Terrorists in the Sinai routinely blew up the pipeline through which gas flowed to Israel and Jordan.

Delek Drilling chairman and Avner CEO Gideon Tadmor, whose companies are part of the consortium, said, “The Tamar and Leviathan partnerships have so far signed a series of agreements designed to enable the supply of natural gas to the Palestinian Authority, to Jordan, and for export as liquid natural gas via the existing installations in Egypt. The MOU with Dolphinus is a further, important link in the series of agreements, allowing the supply of gas to the Egyptian domestic market as well. I have no doubt that these agreements will lead to a strengthening of Israel’s relations with its neighbors.”

The sale price of the gas will be dependent on the price of crude oil on the world market.

The Dolphinus Holding company reportedly represents large non-government industrial and commercial gas consumers.

The Leviathan consortium last month signed an agreement worth $15 billion with Jordan to export $45 billion worth of natural gas over a 15-year period.

Jordan has turned to Israel for gas because of the interruptions in the flow from Egypt.

In February, Tamar partners also announced an agreement to sell natural gas to Jordan through a new pipeline.

The exports of natural gas have played a major role in the increase of the value of the shekel until the shekel-dollar rate touched below 3.40 in the summer. It since has rebounded to nearly 3.75 shekels to the dollar because of reports of slower than expected growth on Israel, a cut in the interest rate and anticipation that the U.S. Federal Reserve Bank will raise the prime rate by early next year.

 

Shekel Dollar Rates Breaks Year High at 3.64

Tuesday, September 16th, 2014

The shekel-dollar rate continued its non-stop climb Monday and reached beyond 3.64 shekels to the dollar but is near a short-term resistance level of 3.66

The rate two months ago was 3.40, and analysts were predicting a further drop, but The Jewish Press reported here before the recent rise that the situation of everyone being of the same opinion was a sure sign that a reversal to the upside was in sight.

However, our previous report saw resistance around 3.62, a level that easily was broke but still is only 2 cents from the next level of 3.66

The dollar has risen against almost all foreign currencies this summer after years of being in the doldrums. The Federal Reserve Bank has given clear signals that the  near-zero prime interest rate will rise next year, which will give investors a higher return for putting dollars in the bank.

The shekel had been strong, translated into a low shekel-dollar rate, for several years until this summer. The Israeli currency was strengthened in part by the prospect of Israel becoming an exporter of natural gas, but a slowdown in the economy, hastened by the war in Gaza, regional turmoil, and the tough government choice of having to raise taxes or the debt ceiling have combined with the strong dollar to send the shekel-dollar rate north.

This is good news for anyone with money in shekels or who gets paid in dollars because the conversion rate back into shekels is becoming higher each day.

That is equally true for Israeli-based international companies, whose earnings have taken a hit in recent years because of a decline in the shekel-dollar rate.

A cheaper shekel helps increase exports and tourism because more dollars buy more shekels.

On the downside, the higher shekel-dollar rate reflects pessimism over the local economy, which until last year was one of the strongest and most stable in the world, surviving quite well even the global bust in 2008.

“The economy is slowing down sharply, and when you combine this with the fact that Israel is part of the global picture, it’s likely that the shekel will continue to weaken,” Robert Carmeli, overseas funds manager at Migdal Capital Markets to told Globes business newspaper.

He and others are predicting that the shekel-dollar rate will approach 3.80 by the end of the year.

Printed from: http://www.jewishpress.com/news/breaking-news/shekel-dollar-rates-breaks-year-high-at-3-64/2014/09/16/

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