MONTREAL - Russia's Gazprom announced this
week that its Swiss-based subsidiary Gazprom
Marketing and Trading, created just last year, has
signed a letter of intent with the consortium
exploiting the Tamar offshore Israeli natural gas
deposit to begin talks for marketing gas from
Tamar and another offshore field, most probably
Dalit.
Tamar is estimated to contain 265
billion cubic meters (bcm) of natural gas. Gazprom
has also expressed an interest in the offshore
Leviathan deposit. It is being developed by
Israel's Delek Group, and is estimated to hold 700
bcm of gas in addition to 4.2 billion barrels of
oil.
Gazprom would purchase the liquefied
natural gas (LNG) from a company that the Israeli
consortium would create, Russian
business newspaper
Vzglyad reported. Gazprom's interest is
principally to keep Israeli natural gas out of the
European markets, where Russia is the principal
foreign supplier.
The Tamar consortium has
already committed between 113 and 136 bcm to six
Israeli entities, including a 15-year deal to
supply 42 bcm to the Israel Electric Corporation,
according to reports published this week in the
Israeli press, This will replace the natural gas
that Israel used to receive from Egypt before the
latter abrogated the contract and cut off the flow
several months ago. Egyptian gas used to represent
slightly over one-third of the source for
electricity generation in Israel; the remainder
comes from coal imported from Russia.
Gazprom's discussions on Tamar are
focusing on the quantity of 2-3 million tons of
LNG per year as from 2017, Reuters reports. The
amount is equivalent to 2.8-4.1 bcm per year
(bcm/y) after re-gasification. According to
Gazprom's own unconfirmed report, the price would
be based on Asian market norms, which are lower
than those in Europe.
However, as the
letter of intent does not prevent Israel from
opening negotiations with other potential
partners, this particular aspect of the report may
be seen merely as a statement of Gazprom's
preferences: much as the statement at the end of
last year by the chairman of Gazprom's board of
directors (and Russia's first deputy prime
minister) Viktor Zubkov, that Gazprom would assist
in the geological explorations and form joint
ventures with Israeli entities, appears to have
been statement of his firm's wishes rather than of
agreements reached.
The shipbuilding and
marine engineering arm of the South Korean firm
Daewoo is constructing an LNG storage unit and
terminal according to a November 2011 contract
signed with the partners in the Tamar consortium -
Noble Energy, Isramco Negev 2 LP, Delek Group,
Avner Oil and Gas, and Dor Alon Energy in Israel
Ltd - French sources report. The contract is
reported to be worth several billion dollars and
to extend out for 15-20 years.
Daewoo will
construct these facilities so as to receive
specially constructed Daewoo tankers that will
take the gas to South Korea, where prices are
between double and triple the price in Israel,
French sources reported at the weekend.
In
order to avoid the lengthy and politically
sensitive process of permit-granting for an
onshore gasification facility, efforts are being
made to develop technology allowing the tankers to
anchor offshore and take on the gas directly while
also liquefying it, a process that involves
cooling it to a temperature of approximately -160
degrees Celsius (-260 degrees Fahrenheit).
It appears that all these negotiations and
contract-signings are proceeding without reference
to the recent Aphrodite strike in Block 12 of
Cyprus's exclusive economic zone, where the
consortium is led by the same US-based company
Noble Energy that leads the Tamar and the
Leviathan consortia.
According to the
Argus news agency, which specializes in energy
matters, quoting chief executive Mehmet Uysal of
the Turkish state firm TPAO, his company has
signed exploration licenses both onshore and
offshore with the administration of the island's
northern third, the Turkish Republic of Northern
Cyprus, which is recognized only by Ankara.
Of the eight exploration blocks concerned,
Uysal says that some of them overlap with areas
over which Nicosia asserts formal authority.
Probably these are offshore from the port of
Famagusta. Uysal said TPAO has no plans to drill
there but may try exploration wells, although this
decision would be taken by the Turkish government
and not by TPAO; but TPAO would begin drilling its
first onshore exploration well in the north this
month.
Meanwhile, the Turkish newspaper
Zaman, considered close to the ruling Justice and
Development Party, quotes Turkey's Energy Minister
Taner Yildiz as asserting that gas from Cyprus
cannot transit Turkey because, rather
incongruously, Israel has failed to apologize for
the Mavi Marmara incident in 2009.
That
concerns the so-called "Gaza Flotilla" incident in
which nine passengers on the ship launched from a
Turkish port died when, according to the United
Nation's "Palmer Report" on the matter (named for
former New Zealand prime minister Geoffrey Palmer,
who headed the four-person panel), it sought
"recklessly" to breach Israel's naval blockade of
Gaza. According to the Palmer Commission, that
blockade was a "legitimate security measure" to
prevent weapons smuggling and was implemented in
accordance with the requirements of international
law.
Dr Robert M Cutler (http://www.robertcutler.org),
educated at the Massachusetts Institute of
Technology and The University of Michigan, has
researched and taught at universities in the
United States, Canada, France, Switzerland, and
Russia. Now senior research fellow in the
Institute of European, Russian and Eurasian
Studies, Carleton University, Canada, he also
consults privately in a variety of fields.
(Copyright 2012 Asia Times Online
(Holdings) Ltd. All rights reserved. Please
contact us about sales, syndication and
republishing.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
