This week’s Baker Hughes report…
Russia and Iran are silently…
Ever since its foundation as an autonomous state in 1948, Israel has relied on imported energy to meet its domestic power demands. However offshore exploration operations have now found giant natural gas fields able to supply the country with more gas than it can use.
Noble Energy Inc, Delek Group Ltd, and a few other companies have announced finds in the Mediterranean Sea that hold enough natural gas to supply Israel’s energy needs for 150 years.
Noble Chief Executive Officer, Charles Davidson, said that they’ve “found far more natural gas that can ever be used in Israel. There are more natural gas resources to discover in Israel and they have to be able to demonstrate there is a market there in order to justify other producers to come in and explore.”
Fantastic news you would think, but unfortunately there are problems. Although Ministry of Energy has said that the gas will be first used to secure the country’s economy and energy future, and that exports will be limited as a result; the reserves may be too economical to develop without exporting to foreign markets.
Yet exporting the gas also has its challenges. A shortage of land will make it difficult to build a plant for turning the gas into LNG for export via tanker, and an offshore facility or pipelines, would be to prone to attacks, and expensive to protect.
Giora Eiland, a retired general and research fellow at the Institute for National Security Studies at Tel Aviv University, confirmed that “the security threat to the gas fields is serious. Protecting all the activities of an LNG infrastructure will be an extremely expensive undertaking, and if a floating LNG platform worth billions of dollars is set up, it will likely be the most vulnerable target.”
For that reason Nick Maden, a senior vice president at Statoil ASA, commented that whilst this is “the play that most companies will be trying to follow,” the fact that there has “been more gas discovered than you can commercialize” he will “be surprised if some of the gas in Israel isn’t stranded.”
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com