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Chevron is considering the construction of a floating LNG terminal in the Eastern Mediterranean to use as an export hub for Asia and Europe.
That’s according to Chevron’s global head of gas, who spoke to Japan’s Nikkei, saying that the Eastern Mediterranean was "being supplied really well, so [there's] going to be another development. We're looking at floating LNG in that market.
Chevron is the parent company of Noble Energy, which has stakes in several large offshore gas projects in the Israeli section of the Mediterranean. The biggest, Leviathan, has recoverable reserves of more than 600 billion cubic meters which, according to Nikkei, is equivalent to 440 million tons of liquefied natural gas.
The report comes out several days after Chevron’s top gas man, Freeman Shaheen, said the company had no plans to build LNG capacity in the United States.
Speaking to Reuters, Shaheen said that the decision was basically a choice between building LNG export capacity and drilling more wells in the Permian or investing abroad, including in the Eastern Mediterranean.
Chevron is the largest player in the Permian with some 2.2 million acres in assets and its production there has been growing. And while it may not make business sense to build an LNG terminal on the Gulf Coast, it seems to make business sense to build such a terminal off the Israeli Mediterranean coast.
Indeed, it does make sense for the location to be much closer to the two biggest LNG markets these days, Europe and Asia. That would make the LNG produced at the future terminal more affordable for more buyers and more profitable for the producers.
Few details are clear at this point as to specific production capacity and timelines but, according to Shaheen, exports from the facility are set to begin in the late 2020s at the earliest.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.