05/22/2011 23:15

Leading energy firms advocate the future export of both liquefied natural gas from the Leviathan basin, oil shale from the central Israel Shefela rock basin.

Leading energy firms advocated the future export of both liquefied natural gas from the enormous Mediterranean Sea Leviathan basin, as well as oil shale from the central Israel Shefela rock basin at a gathering on Sunday that brought together pioneers in Israeli and international natural-gas development.

Noble Energy is currently exploring liquefied natural gas (LNG) export options in Leviathan, due to both the costs of the project, as well as a projected increase in the global demand for LNG, according to Lawson Freeman, vice president for the Eastern Mediterranean sector of the company.

Meanwhile, Dr. Harold Vinegar of Israel Energy Initiatives, Ltd. sees Israel’s huge deposits of oil shale that his company is currently beginning to work on as a potential moneymaker and conduit to energy independence for the country, working synergistically with natural gas.

The two spoke Sunday at a conference on “Israel and the Natural Gas: Exploration, Production and Utilization,” held at the Hebrew University of Jerusalem’s Institute of Earth Sciences.

“Leviathan is an export project,” Freeman said. “The only way to monetize something that size is to export it.”

Noble Energy is confident that this is the most logical step, as the global demand for LNG is expected to double in the next 20 years, according to Freeman.

“You have a lot of possibilities with LNG because obviously you can market it in a lot of different areas,” he said, noting that as people veer away from nuclear power, they are inclined to use LNG more.

While a pipeline connection directly to Greece would be maximally beneficial for exports, a pipeline to a future LNG plant in Cyprus is the only currently feasible possibility geopolitically, according to Dr. Amit Mor, CEO and energy specialist at the Eco Energy consulting firm, who spoke about the directions and challenges in developing the Israel natural gas economy.

Leviathan is only 200 kilometers away from Vasilikos, Cyprus, he explained.

“It would’ve been great to link the field to Israel – to do it in Ashkelon or Eilat – but the Israeli public will not allow construction of a major LNG plant here,” Mor told The Jerusalem Post. “I don’t believe any government of Israel is going to fight the public against it.”

But no matter how the gas is transported, experts agree that the new field will primarily be delivered outside of Israel.

“Leviathan will be mainly for exports – perhaps solely for exports – because Tamar can satisfy our consumption for the next 20 to 25 years,” agreed Prof. Eytan Sheshinski, in a phone conversation with the Post following the conference.

Sheshinski had spoken that day about his committee’s report, which was adopted by the government earlier this year – as well as the need to bring Israel up to standard with OECD countries.

Aside from the future potential in Leviathan, Noble Energy has currently been working on increasing “deliverability” in the current Mari-B gas field off the coast of Ashkelon, and completed two new largediameter wells in September.

In the Tamar field, adjacent to Leviathan, the company is currently determining the most opportune place within the field to acquire the gas. Of Noble Engery’s $2.7 billion investments this year, 0.7b. of the total has gone to Eastern Mediterranean projects, according to Freeman.

“We’re very proud of Mari-B – it supplies fuel for about 20 percent of electricity generation,” Freeman said, noting that since the field was hooked up to the Israel Electric Corporation grid in 2004, the country has saved savings over $5b. in fuel oil, and 13 million-metric tons of CO2 emissions. “That’s like taking all the cars in Israel off the road for a year.”

Such developments in natural gas, working in conjunction with shale oil, could pave Israel’s road to energy independence, argued Dr. Harold Vinegar of Israel Energy Initiatives, which is currently in a pilot phase of drilling through the shale in the Shefela basin.

While the US contains the largest oil shale deposits at 1.2 trillion barrels, Israel has 250b.

– “making it equal in magnitude to Saudi Arabia in terms of proven reserves,” according to Vinegar.

“Israel is very well positioned for oil exporting,” he said.

“You can export across the Mediterranean [from the Ashdod pipeline] to supply it to Europe, and through Eilat to supply it to the Asian market.”

Mor corroborated Vinegar’s claims, telling the Post that he is very optimistic about the project, even if it is years away from being realized.

“You can produce oil from the shale, and you can utilize it for domestic consumption instead of importing oil,” Mor said, adding that there is opportunity for exporting.

While Sheshinski agreed that he saw “potential” in shale oil and said he was “impressed” by Vinegar’s talk, he added: “I would worry about the environmental impacts of shale oil, and other companies are worried about that. While it is a potential alternative, and a viable one as shown in other countries, it may have some detrimental effects on the environment, and we should consider that.”

To extract oil from shale rock, the company must drill through the rock and heat the area to extremely high temperatures, a process that Vinegar claims is environmentally sound, despite recent criticism from a multitude of green groups.

The best method for heating the rock is by using natural gas – which is a fraction of the cost of the oil that will then be produced, he argued.

“Reliable gas supplies enable more rapid commercial development of oil shale,” Vineger said. “The energy content and economic value of natural gas can be multiplied many times by using some of it as a fuel for heating oil shale in situ. The combination of abundant natural gas and oil from oil shale can make Israel completely energy independent.”