Israel’s gas industry is still in an embryonic stage. Having little experience in the production and delivery of natural gas, Israel must import equipment, technology and know-how in order to take advantage of the opportunities waiting beneath the sea.
Norway has been in the business since the 1960s and many of its energy companies are global leaders in their markets. Whatever other economic benefits lie ahead, Israel’s natural gas industry has become a platform for strengthening trade and business ties between Israeli and Norwegian companies.
Making Offshore Work Big Time
Several Norwegian companies are already involved in Israel National Gas Lines (INGL) infrastructure projects, Tamar and other gas exploration projects. Other companies have an eye on what promises to be the economic game-changer for Israeli gas, the Leviathan gas field.
Norway’s APL – Advanced Production and Loading AS, a subsidiary of National Oilwell Varco , manufactured the gas terminal buoy commissioned by INGL that will receive and regasify LNG delivered to it by tankers some 10 km off the Hadera shore. Another major energy firm, AGR Petroleum Services Holdings AS , is taking a ground floor stake in gas discovery. It has set up offices in Israel and is actively involved in the development of several Levant gas fields. The company which has more than 500 offshore wells worldwide and 1000 reservoir studies under its belt, operates and owns a 5% interest in the six offshore pelagic oil and gas exploration licenses. Controlling interest in the licenses – Yishai, Aditia, Lela, Yahav, Yoad and Ayala – is held by Adira Energy Ltd, a publicly traded company based in Canada, which has recently filed a prospectus to crosslist shares on the Tel Aviv Stock Exchange.
Aker Solutions, a global provider of engineering and construction technology and services, landed two Tamar-related contracts. The first was an order to deliver a complete mono ethylene glycol (MEG) reclamation unit which removes the potential for blockages in subsea pipelines. The second was for some 330 km of steel tube subsea umbilicals which serve as the lifeline for off-shore operations by providing power and fiber optics to the site.
Höegh LNG‘s contribution to the Tamar project will more visible. Höegh LNG is a fully integrated ship-owning company specializing in floating LNG services, including cutting edge engineering and technological solutions. Höegh LNG owns and operates LNG carriers for the transportation of liquefied natural gas, as well as floating storage and regasification units (FSRUs) which act as floating LNG import terminals. The company was engaged by Daewoo Shipbuilding & Marine Engineering (DSME) to carry out the pre-front-end engineering design (pre-FEED) for the floating liquefied natural gas (FLNG) terminal, designed to enable Tamar’s gas to be exported expediently to the Far East. A FLNG terminal is a huge floating structure that cools the gas to minus 160˚ Celsius and then transfers it into specialized onboard storage tanks. The LNG is then loaded onto shuttle tankers called LNG carriers which have heat-insulated tanks for storing and transporting the very cold LNG, obviating the need to build costly and environmentally problematic land-based storage and transfer facilities. Floating liquefaction is a new application of existing technology and while a few installations are being built, they have yet to become operational. It is Höegh LNG’s intention to own and operate FLNGs and to provide floating liquefaction services under long-term agreements.
Levant LNG Marketing, a partnership between DSME, Norwegian D&H Solutions, has recently concluded a cost sharing agreement with the Tamar partners in which they will participate in the cost of the FEED for the floating terminal. In early 2012, Levant LNG Marketing also negotiated a letter of intent with Gazprom Marketing and Trading Switzerland to begin non-exclusive talks for gas supply from Tamar.
Prepping For Leviathan
Estimated to have twice as much gas as Tamar, the Leviathan project has already caught the eye of global LNG players. Last December, the Leviathan partners, headed by Nobel Energy and Delek Drilling, agreed in principle to sell a 30% stake and the right to operate LNG developments in the project in exchange for US $1.25 billion to Australia-based Woodside Energy. Located even and farther and deeper offshore than Tamar, Leviathan is stirring avid interest from Norwegian oil and gas companies as well. In November, meetings organized by the Norwegian-Israeli and Israeli-Norway Chambers of Commerce brought Norwegian and Israeli companies face to face in Stavanger, Norway’s oil and gas capital. The Israeli delegation included Israel’s Ambassador and Deputy Ambassador to Norway, Prof. Naim Araidi and George Deek, Yaakov Altschuler, CTO of Delek Drilling, Reuven Krief, Chairman of the Krief Group and Orni Izakson, Hon. Consul of Norway in Tel Aviv and Chairman of the Israel-Norway Chamber of Commerce.
They met with three Norwegian companies: Subsea 7, one of the world’s largest “seabed to surface” offshore engineering and service contractors; Seadrill Ltd, owner of one the largest fleets of drill ships and the Norwegian hi-tech incubator operator, Ipark. Subsea 7 expressed interest in Leviathan and the 130 km marine pipeline that will connect the gas field to Israel’s onshore infrastructure. In addition, discussions were held regarding possible training of Israeli gas engineers and technicians, including the establishment of scholarships for Israeli students studying at the University of Stavanger. Orni Izakson expressed his hope that the contacts made in the meetings will materialize into an actual business involvement. As for the study abroad and scholarship program: “That’s something that Dag Abrahamsen, my counterpart at the Norwegian-Israel Chamber, and I will work on together.”