MEDITERRANEAN GAS OUTLOOK THREATENED
BY ARMED CONFLICT?
The
population in the EASTERN MEDITERRANEAN region is expected to increase by as
much as 35 percent in the next 20 years. Natural gas deposits in the Levant
Basin are expected to keep the energy needs of the growing population satisfied
indefinitely. Governments in the region are working quickly to get excess
natural gas to the international market. CYPRUS is already taking
preliminary steps to start construction on a liquefied natural gas terminal and
energy companies are queuing up in anticipation of an ISRAELI court decision on
gas export polices. Ongoing conflict in SYRIA and territorial disputes between ISRAEL
and LEBANON, however, may interfere with ambitions for the natural gas deposits
in the MEDITERRANEAN SEA.
CYPRUS
reported its first offshore natural gas discovery just two years ago and is
already laying the groundwork for an export terminal. Construction could start
as early as 2015 and LNG exports are planned for 2020. Executives there said
they'd likely have to make accommodations for natural gas from ISRAEL and LEBANON
in their future export plans. Last year, one of AUSTRALIA'S biggest energy
companies, Woodside Petroleum Ltd., said
it would fork over more than $2 billion for a stake in the Leviathan natural
gas field. The company said this week it was waiting patiently for the ISRAELI
courts to make a decision affecting gas export policies.
The
U.S. Geological Survey estimated the Levant Basin has probable undiscovered
natural gas resources of 122 trillion cubic feet. At current rates of
consumption, that may be enough to meet domestic natural gas demand almost
indefinitely. Leviathan, the biggest of the Levant fields with 18 trillion
cubic feet of estimated recoverable reserves, was discovered three years ago
and could start production by 2016. Tamar, with an estimated 10 trillion cubic
feet of reserves, started
production this year, four years after discovery.
TERRITORIAL DISPUTES BETWEEN ISRAEL AND LEBANON COULD LIMIT
THE NATURAL GAS POTENTIAL IN THE REGION
The
U.S. Energy Department's Energy Information Administration said nearly
all of the "significant" natural gas discoveries of natural gas made
in the last 10 years or so are in the Levant Basin. Most of the discoveries
were made in ISRAELI waters. LEBANON contends some of the natural gas lies
within its territorial waters and two years ago, the ISRAELI military launched
drones over its gas fields in the Mediterranean, saying it was fearful of a
Hezbollah attack. Hezbollah took its 2006 war with ISRAEL as an sign it could
take on its adversaries using conventional military means and, in 2011,
Hezbollah pledged
to use whatever means necessary to defend LEBANON'S national interests.
The
EIA said armed conflict and territorial disputes could limit the natural gas
potential in the region. In terms of oil, the EIA said SYRIA had the largest
reserves as of January. Hezbollah strongholds in southern Beirut were the
target of recent bombing campaigns as the Shiite organization faces more
threats since acknowledging it was fighting
alongside pro-government forces in SYRIA.
Background Information:
SYRIA ALLEGEDLY
DISCOVERED LARGE OIL AND NATURAL GAS IN ITS TERRITORIAL WATERS
IRAN - IRAQ - SYRIA GAS PIPELINE
AGREEMENT SIGNED IN JULY 2012 WORTH US$10 BILLION
TRANS ARABIAN PIPELINE “TAPLINE”
There
is no sign the conflict in SYRIA is letting up. The U.N. Security Council said
it scheduled an emergency meeting to
discuss the alleged use of chemical weapons in SYRIA. Pro-Western lawmakers in
Beirut, meanwhile, said
Hezbollah's security crackdown following last week's bombing was "an aggression
against the state." The White House said the use of chemical weapons in SYRIA
"crossed clear red lines that have existed within the international
community for decades." But that was in June, the last time allegations of
chemical weapons surfaced.
The
population in the Mediterranean region could reach 62 million by 2030.
While representing less than 1 percent of the total proven oil and natural gas
reserves, prolific offshore basins could alter the regional markets
substantially. Conflict, however, could inhibit much of the regional
development in the short-term. With most signs pointing to an escalation of the
crisis in SYRIA, the energy sector won't be the only thing redefined in terms
of regional dynamics.
Comment by Geopolitical Analysis and Monitoring: Worthwhile to mention is that the SYRIAN
conflict will most probably continue for some time, similar to the civil war in
LEBANON, which lasted 15 years.
By
Daniel J. Graeber via Oilprice.com
It was nicely written blog post. This blog clearly shows the power of Israel and gas reserves in Israel. Really enjoyed reading.
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