06/16/2011 03:24

Israel Oil Co. instructed to begin developing one-billion cubic meter Or natural gas reservoir this week.

The National Infrastructures Ministry instructed the Israel Oil Co. and its partners to begin developing the one-billion cubic meter Or natural gas reservoir, just after instructing Noble Energy to do the same in the small Noa North field the day before, the ministry announced late on Tuesday night.

Located off the coast of Ashkelon and adjacent to Noa North, Or resides within the larger, 52,300-dunam (5,230 hectare) Med Yavne field, of which Israel Oil owns 14.8 percent, according to data provided by the ministry. Petroleum Commissioner Dr. Michael Gardosh instructed the company to submit its drilling and development plans for the field to the office by August 1, and also asked the group to investigate the possibility of connecting the Or field to the production system already being prepared for the development of its neighbor, Noa, the ministry said in a statement.

Ministry gives nod to develop Noa gas field
Analyst: Jordan to buy Israeli gas as alternative to Egypt

The ministry had instructed Noble Energy to begin the Noa development in order to bridge any short falls that might occur between the depletion of Israel’s current Mari-B Yam Tethys supply and the opening of the Tamar gas reserves, as experts have predicted that Tamar will only be ready sometime between 2012 and 2013.

If the Egyptian natural gas supply remains inaccessible, the Mari-B Yam Tethys resources will probably only be able to provide gas for approximately another year and a quarter. Having the smaller gas field readily available by fast extraction could therefore fill in the gaps in the case of an “expected shortage of natural gas at the end of the year 2012,” according to the statement.

Developing the Or field will help fill in such gaps, a ministry spokeswoman told The Jerusalem Post on Wednesday, emphasizing the importance of having many different supply sources.

Leading scholars in Israel’s natural gas industry had praised the government’s decision to allow drilling in Noa earlier this week and felt that the second field holds equal importance to the first – even though the Egyptian gas supply to Israel resumed at the end of last week.

“According to the Petroleum Law, the government has a right to instruct those who have concession over the field to develop it if it is for a national need,” said Dr. Amit Mor, CEO and energy specialist at the Eco Energy consulting firm.

“Now this whole field is very small, one billion cubic meters, and it only makes sense to develop it because it is adjacent to the Noa field.”

Mor went on to explain that the development is also only logical if a pipeline from Noa, located about 40 km. offshore, is “constructed to deliver the gas to the Mari-B platform facilities” – the very option that the National Infrastructures Ministry has instructed Israel Oil to investigate.

“It makes sense to develop the field only once Noa is developed,” Mor said. “Since there is a major need for the gas in the interim period between the depletion of Mari-B and the arrival of gas from the Tamar field, there is an opportunity to develop Or as well.”

Mor stressed that the availability of the small fields is “an important security measure,” and that it is crucial “to use any available source of gas due to geopolitical reasons on the one hand and technical delays in the Tamar development on the other.”

“In this interim period the country should take all measures to find gas sources to avoid periods of lack of gas to avoid using very costly and polluting heavy fuel oil, gas oil and diesel,” he added.

Prof. Brenda Shaffer, an expert on energy policy and management in the School of Political Science at the University of Haifa agreed, noting that drilling in these small fields “might be the only option,” and is certainly preferable to “using more coal and more diesel.”

Depending on the Egyptian supply “would be impossible from a security perspective,” according to Shaffer.

“Even if gas was flowing fine, I think it would be imprudent to be dependent on an external source,” she said. “Even if their assessment is that things would be stable, it is wise to have a backup.”

An additional method that Amit Mor thinks should be employed simultaneously is the importation of liquefied natural gas (LNG) floating regasification units which, like the fast extraction in the small fields, would take about a year and a half to get started, he explained.

“Importation of fast track LNG is very important to secure continuous supply of gas in the short-term but also in the longer term,” Mor said.

But at the moment, drilling in the small fields seems like the most viable option, according to the experts.

“They’ve tried different options in the last year to solve this problem so obviously the assessment is that this is the least worse option of all,” Shaffer said. “It’s not like they’re saying, ‘Let’s just try this and see what happens’ – they’ve pursued other options that haven’t worked out.”