Gas discoveries in the offshore Levant basin could change the energy supply dynamics in the Eastern Mediterranean region and spur natural gas exports in the near future, according to a new report.
Reserve figures from countries in the region – Cyprus, Israel, Syria, Lebanon, Palestinian territories, and Jordan – are likely to change as more drilling takes place. Reserves from discoveries made since 1999 by Cyprus, Israel, and Palestine territories alone stand at more than 41.4 Tcf (1.17 Tcm), according to the US Energy Information Administration (EIA).
In a global context, the region’s reserves do not even hit 1% of the world’s total proven oil and gas reserves, but the small region has become a hot spot following some big discoveries in recent months. The region also is a political hothouse and securing export routes will be a major challenge, especially with Syria’s current turmoil causing international concern.
Discoveries Offer Potential
“Uncertainty over the location and configuration of export infrastructure persists, but several proposals are making progress despite complications posed by regional security problems, territorial disputes, and macroeconomic uncertainty,” the EIA said.
“There have been a number of significant discoveries of natural gas in the Levant basin since 1999. Large fields in Cyprus and Israel contain most of the recently discovered natural gas reserves. Together the estimated recoverable reserves in these fields total more than 40.5 Tcf (1.15 Tcm) of gas.”
The main discoveries in the region are: Aphrodite in Cyprus with 7 Tcf (198.3 Bcm); Israel’s Tamar (10 Tcf/283.3 Bcm), Leviathan (18 Tcf/509.9 Bcm), Tanin (1.2 Tcf/33.9 Bcm), Karish (1.8 Tcf/50.9 Bcm), and Mari-B (1.5 Tcf/42.5 Bcm). Palestine also claims the Gaza Marine find (1 Tcf/28.3 Bcm) as its resource.
“A large share of the newly discovered energy resources will help meet domestic demand in the countries of the Eastern Mediterranean region, but there could be enough surplus natural gas to spur exports from Cyprus and Israel,” the report said.
“Determining how and where to export natural gas remains a topic of continued debate, with several proposed export routes competing for political and economic support.”
There are proposals, at different stages of development, to export gas via pipeline and as LNG from Cyprus and Israel.
A proposed LNG terminal in Cyprus already has started pre-FEED work and could start construction in 2015. Cyprus hopes to incorporate volumes from fields in offshore Israel into its plans, but Israel appears to prefer its own LNG facility at this stage, the EIA said.
Other natural gas export options include: a new pipeline from the Eastern Mediterranean to Crete, where the volumes could flow into the European grid; a new pipeline from the Eastern Mediterranean to Turkey; and the use of existing infrastructure to send volumes to Egypt for export via its LNG facilities.
“Several factors may influence how and when exports may come online: regional insecurity, such as the ongoing conflict in Syria and the recent unrest in Egypt; territorial disputes, such as that between Israel and Lebanon; and the status of economies in both potential exporting countries and destination markets like Europe and Asia,” the report said.
Levant Basin Reserves
Extending across a large section of the offshore areas of the Eastern Mediterranean, the Levant basin is at the center of recent exploration activity in the region.
In a 2010 report, the US Geological Survey (USGS) estimated that the Levant basin has mean probable undiscovered oil resources of 1.7 Bbbl, natural gas resources of 122 Tcf (3.46 Tcm), and NGLs of 3.1 Bbbl.
“While the USGS estimates do not reflect the entirety of potential energy resources in the Eastern Mediterranean region, the resources of the Levant basin likely represent a large part of the overall resource base,” the EIA said.
“The USGS estimate of 1.7 Bbbl of oil, if discovered, would increase the region’s proved reserves by slightly less than 70%, while the 122 Tcf (3.5 Tcm) of natural gas represents more than six times the region’s current proved reserves.
“An additional 1.7 Bbbl of oil in the Levant basin would meet regional demand for roughly 20 years at current levels of consumption, while 122 Tcf (3.5 Tcm) of natural gas could meet current regional demand almost indefinitely.
“Nearly all the recent significant discoveries in the Levant basin were of natural gas, and, while offshore exploration may eventually yield recoverable quantities of oil, to date there have not been any commercially viable discoveries.”
History And Politics
The oil and gas sector sprang into life in the Eastern Mediterranean around 80 years ago when oil exploration started in Syria following the successes in neighboring countries like Saudi Arabia.
Syria and Israel are also natural gas producers, although those sectors did not develop commercially until the 1980s in Syria and the mid-2000s in Israel. Jordan has had very low levels of production of oil and natural gas since the 1980s, and the country relies primarily on imports to meet internal demand.
In Cyprus, Lebanon, and the Palestinian territories oil exploration and development is still in their infancy; however, each is keen to capitalize on successful offshore exploration in the Levant basin to develop their own domestic natural gas reserves.
“Today, there is considerable focus on exploration and new projects, but international transit remains a key policy consideration of several Eastern Mediterranean countries. As the region continues to discover and develop hydrocarbon resources, the pressure to increase its role as an important energy hub is likely to increase,” the EIA said.
The Eastern Mediterranean region includes eight significant basins: Cyprus, Eratosthenes High, Latakia, Levant, Judea, Nile Delta, Western Arabian Province, and Zagros Province.
The majority of the historical hydrocarbon production has taken place in the Nile Delta, Western Arabian Province, and Zagros Province.
Most of the Nile Delta basin lies within Egypt’s territorial waters, although there is a small area under Cypriot control. To date, there have not been any significant discoveries in the Cypriot territory, although much of Egypt’s offshore oil and gas production comes from the area.
The Western Arabian Province basin covers large parts of Jordan and Syria and extends into Iraq, Saudi Arabia, and Turkey. Most of Jordan’s fields and many of Syria’s are in the Western Arabian Province.
The Zagros Province basin extends from Turkey in the north, through Iraq and Iran, terminating in the Gulf of Oman in the south. Several of Syria’s largest fields are part of the Zagros Province basin, but the vast majority of fields in this basin are in other countries, including Iraq, Iran, and Saudi Arabia.
“While the Western Arabian and Zagros province basins account for most of the historical hydrocarbon production in the region, most of the focus today is on the Levant basin due to the recent discoveries,” the EIA report said.
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