Security of gas supply: The role of gas developments
in the Mediterranean region
Malta Energy Conference 2014
10-11 July, 2014
“Operators’ Perspectives for Upstream
Developments:
Risks and Rewards in the Levant Basin”
Noble Energy International Ltd
1
Eastern Mediterranean
ERATOSTHENES
HIGH
LEVANT
BASIN
Cyprus
Leviathan
Tamar
NILE DELTA
Noa
Mari-B
Dead Sea Transform
Dalit
2
Major Levant Basin Discoveries
Recent Eastern Mediterranean Gas Discoveries
KYRENIA
!
NAHR AL ASI
NA
HR
AL
AS
I
!
!
NA
HR
AL
AS
I
Cyprus
NA
HR
AL
AS
I
Vasilikos
LIMASSOL
!
185 Km
NA
HR
AL
LI
TA
N
I
Lebanon
NAHR AL
LITA NI
Syria
Block 12
Tamar
JORDAN
Cyprus A
Leviathan
Israel
Dalit
JORDAN
HADERA
!
Jordan
TEL-AVIV
!
AD
AN
SE
JO RD
ASHDOD
!
ASHKELON
!
A
RIVER
Mari-B
DE
KTIMA
!
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Levant Basin – History (1)
•
•
•
•
Major oil and gas activity nearby (Egypt, Libya)
Minor oil and gas finds in shallow water
Deep water technology was barrier until 1990’s
Offshore licensing in region:
–
–
–
–
–
Israel (negotiated awards)
Cyprus (2 licensing rounds, in 2008 and 2013)
Egypt (Nile Delta, Deep-water licensing rounds)
Lebanon (planned licensing rounds)
Turkey (negotiated awards)
4
Levant Basin – History (2)
• Commercial activities commenced with Noble’s Mari-B natural
gas discovery in Israel in 243 m WD, in 2000 (1 TCF) –
production started in 2004, supplying domestic power
generation
• Ultra-deep-water era started with Tamar discovery in 2009, in
1,676 m WD (about 10 TCF, currently producing up to 1 BCFD)
• Leviathan discovered in 2010 in about 1,700 m WD, about 19
TCF, currently being appraised
• Aphrodite discovered in Cyprus Block 12 in 2011, also in about
1,700 m WD (3.6 to 6 TCF, mean of 5 TCF)
• Further drilling planned during 2014 and 2015 in Cyprus’ EEZ
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Levant Basin Commercialization (1)
• Currently about 40 TCF have been discovered in Israel
and Cyprus
• Tamar has commenced production (subsea tieback to
platform, pipeline to shore)
• Other fields being appraised
• Commercialization concepts under consideration:
–
–
–
–
–
Onshore LNG
FLNG
CNG
Regional pipelines
Petrochemical/fertilizer projects
6
Levant Basin Commercialization (2)
• Commercialization concepts:
Concept
Pros
Cons
•
•
•
•
•
Onshore LNG
FLNG
CNG
Pipelines
Petrochemical/fertilizer
Max flexibility
Good flexibility
Lower Capex, faster
Lower Capex, faster
Grow local industry
Max Capex
Max Capex
Limited reach
Single buyer
Require cheap feedstock
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Levant Basin Hurdles
• Physical
– Water depth (>2000m to Cyprus, >3000m to Greece)
– Rugged, tectonically active seabottom
– Distance to shore (can be >180 kms)
• Commercial
– In some cases, small domestic markets require export
projects to justify high development costs
– High Capex for LNG
– Emerging technology issues for FLNG and CNG
– Lack of existing infrastructure
8
Potential Gas Pipeline Route
Cyprus Block 12 to Vasilikos
9
Cyprus – Seafloor Tectonics
10
Cyprus – Seafloor Canyons
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Financing of Energy Projects
• Generally, high-Capex oil and gas industry
projects require some portion of outside
financing
• International lenders look for:
– Operator with good track record
– Government contract with strong stabilization clauses
– Sufficient gas resource to cover gas supply contract during the
plateau production phase
– “Skin in the game,” investment by co-venturers
– Alignment between upstream and midstream parties
– Well-structured GSPA’s
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Environmental, Health & Safety (EHS)
and Training
• EHS
– Regulatory environment in East Med is evolving to fully address
oil and gas industry activity
• REMPEC (Malta) facilitating implementation of offshore regulations
• EU Safety Directive being extended to East Med
• EU has signed Offshore Protocol for the Med
– Establishing Environmental Emergency Management
Preparedness and Response capabilities in East Med
• Training
– In early stages of development for knowledge of the oil and gas
industry
– Government contract-mandated training programs being
implemented
– University programs specific to the industry have been initiated
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Levant Basin Opportunities
• Formative hydrocarbons industry – can draw on more established
projects in the surrounding regions (e.g. Egypt, Italy)
• Good probability of significant quantities of gas being found with
additional drilling
• Possibility of deep oil
• New hydrocarbon projects can develop one or more industry hubs
in the Levant Basin
• Long-lived hydrocarbon projects can assist in providing economic
and political stability to the region, as well as energy resources to
markets
– Commerce is a great uniter
– “All sides have something to gain…and something to lose”
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The Levant Basin story is just
beginning!
Thank you for your attention.
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