Author: Calcalist (Israel) Posted March 6, 2012
The world's biggest energy corporation, Russian energy giant Gazprom, may be on its way to Israel.
Calcalist has learned that a team from Gazprom held a series of meetings this week with representatives of Yitzhak Tshuva's Delek Energy and Noble Energy to discuss a potential future partnership in the exploratory Leviathan gas field.
According to Calcalist’s information, the Russian delegation included some 15 representatives and was headed by Gazprom Global Liquefied Natural Gas (LNG)'s Managing Director, Frederic Barnaud.
As previously reported, a Gazprom delegation visited Israel about a year ago and held a round of talks with the major players in the local energy market holding exploration licenses. However, at the time, the negotiations bore no fruit. Unlike the previous visit, the delegation currently visiting Israel includes Gazprom representatives who did not take part in the visit here last year. The present visit is taking place after gas reserves in the exploratory Leviathan gas field, which is at an advanced stage of development, have already been verified, whereas at the time of the last visit, only potential reserve estimates were available.
Three main options for collaboration were discussed in the talks, held over a couple of days: The first option considered is for Gazprom to enter into partnership in the Leviathan gas field, where natural gas reserves of some 453 BCM have been found. Development costs of the Leviathan, which is expected to go into operation by 2017 at the latest, are estimated at 6 to 8 billion dollars. A new partner entering the venture would inject the much-needed funds for stepped-up development of the gas field. The proposed move would dilute the current partners' holdings, which are shared by Noble Energy (39.66 percent), Delek Energy (45.34 percent) and Razio Oil Searching Ltd. (15 percent).
The second option being discussed is the purchase of gas from the Leviathan field for marketing by Gazprom in the Middle East and the Far East, where Gazprom seeks to gain a foothold. The Russian energy giant, which relies heavily on gas exports to Europe, is reportedly in search of new markets to make up for potential revenue shortfalls in the event a new gas field is found in Europe or in the case of a financial crisis hitting the continent.
The third option under consideration involves both partnership with Gazprom and the pre- purchase of gas from the Leviathan field, as well as the building of a joint liquefaction facility and shared exports.
The interest sparked by Leviathan is nothing new. As reported by Calcalist, a delegation on behalf of China Energy Corporation also visited Israel in November 2011 to explore potential investment in the Leviathan gas partnership.
Delek Energy has declined comment, as has Noble Energy.
Read More: http://www.al-monitor.com/pulse/business/2012/03/gazprom-seniors-visiting-israel.html