The
partners in the Leviathan natural gas reservoir have signed another agreement
with
Jordan
. The new agreement is worth $15 billion, much
larger than the two previous deals signed. Tel Aviv Stock Exchange (TASE)
trading in the shares of the partners - Ratio Oil Exploration (1992) LP (TASE:RATI.L),Avner
Oil and Gas LP (TASE:AVNR.L), and Delek Drilling Limited Partnership (TASE:DEDR.L)
- was halted ahead of the news.
Delek
Drilling CEO Yossi Abu and Noble Energy senior VP J. Keith Elliot are currently
in
Jordan
to sign a giant deal with the Jordanian
Electric Power Company (JEPCO). The deal covers 15 years, during which 3
billion cubic meters (BCM) of gas will be sold to
Jordan
annually - a total of 45 BCM.
Jordan
's total natural gas consumption is
estimated at 4.5 BCM annually, and as of now, it must use diesel fuel and fuel
oil as a substitute for gas.
Jordan
formerly imported 2.5 BCM from
Egypt
through the Arab Gas Pipeline
(AGP). The shortage of gas in
Egypt
and the problems and sabotage in
Sinai, however, eventually caused an almost total halt in the flow of gas to
Jordan
.
According
to an Israeli cabinet decision dated
June 23, 2013
, up to 40% of the natural gas
reserves discovered in
Israel
can be exported either by pipeline
or as liquid natural gas (LNG). Of the 113 trillion cubic feet (TCF) consumed
worldwide, only 11 TCF are consumed as LNG, because it is usually expensive,
takes a great deal of time, and is more technically complex than gas through a
pipeline.
This
explains why the Tamar and Leviathan partners want to use a pipeline for
exports; furthermore, a land-based pipeline is cheaper than an undersea
pipeline. Gas can be exported by pipeline from the Tamar and Leviathan
reservoirs to the Palestinian Authority (PA),
Jordan
,
Egypt
,
Cyprus
, and
Turkey
, of which the PA and Jordan are the
most accessible. The PA's consumption capacity is limited, which makes the
Jordanian market the most attractive.
Simultaneously
with its negotiations with
Israel
,
Jordan
is also considering other options
for importing natural gas. These include importing gas from Basra, Iraq to
Aqaba Port in Jordan, LNG imports through Aqaba Port while using a floating
storage regasification unit (FSRU) to reconvert LNG to gas, and additional gas
exploration in Jordan (an option that has not produced many results to date,
given that only 200,000 cubic meters, all consumed in 2013, have been found
there so far).
Last
February, the Tamar partners announced that an agreement had been signed to
sell natural gas from the reservoir to Jordanian companies Arab Potash and
Jordan Bromine, which operate on the Jordanian side of the
Dead Sea
. The gas was sold through a
US
company named NBL Eastern
Mediterranean Marketing controlled by Noble Energy, which owns 36% of the Tamar
reservoir, while Isramco owns 28.75%, Delek Drilling and Avner 15.625% each, and
Dor Gas 4%. The agreement is for 15 years, with a total value of $500 million. Under
this agreement, 1.8 BCM will be supplied to the Jordanian companies, and gas is
slated to start flowing in 2016, when the pipeline to
Jordan
is completed.
Israel
Natural Gas Lines (INGL) will be responsible for laying the pipeline, with
financing from the Tamar partners. As of now, however, there are still problems
with the pipeline route, which is expected to pass through nature reserves at
the southern
Dead
Sea
.