LNG

Italian major Eni has successfully completed the Cronos-2 natural gas well, drilled to appraise the Cronos discovery in Block 6 offshore Cyprus as the East Mediterranean becomes a focus for the development of a gas and LNG hub to supply Europe.

The Government of Cyprus said it was in alignment with US major Chevron Corp. on the imminent development of the Aphrodite natural gas field in the Eastern Mediterranean, the new regional natural gas and LNG hub despite security concerns over the ongoing conflict.

NewMed Energy, the Israeli company with a stake in the Aphrodite natural gas field offshore Cyprus, said talks would continue with the Cypriot Government after the rejection of a new field development plan that includes transporting pipeline gas to Egypt for liquefaction and export to Europe as LNG or for domestic use.

The Cypriots are in favour of the Aphrodite volumes being shipped to Egypt, though are against the new plan that does not include a previously outlined floating gas processing plant at the field in Cypriot waters.

The partners in the Aphrodite licence are NewMed and energy majors Chevron Corp., the operator of the Aphrodite field, and UK-based major Shell.

The Shell stake came from its acquisition of BP Group and Chevron’s from buying Noble Energy.

The field is located in Block 12 of the Cypriot Exclusive Economic Zone (EEZ) 170 kilometres (106 miles) offshore the Cypriot city of Limassol and is estimated to hold around 4.4 trillion cubic feet of natural gas.

“The Partnership respectfully reports that, according to a letter of reply delivered to the project's operator, Chevron Cyprus Limited, the government of Cyprus has decided not to approve the Updated Plan, and has invited the partners in the Aphrodite Reservoir to continue the discussions on the matter in early September 2023,” NewMed explained.

New plan

According to the Updated Plan, the production of natural gas from the Aphrodite field and the processing thereof would be done through the construction of a subsea pipeline and connection to existing offshore and onshore infrastructure in Egypt, without the construction of a floating production and processing facility within the area of the Reservoir.

“The letter of reply states several reasons for the decision of the Cypriot government not to approve the Updated Plan, including the claim that the Updated Plan is expected to increase the technical and commercial complexity of the project, and is not expected to produce the advantages put forward as detailed in the report of 31 May 2023,” NewMed added.

“The partners in the Aphrodite Reservoir, with the assistance of their outside counsel, intend to consider the implications of the decision by the government of Cyprus and are preparing for the continued discussions,” stated NewMed.

Scheduled for commissioning by 2026, the Aphrodite gas field will be capable of delivering more than $9 billion of direct economic benefits while providing energy independence to the Republic of Cyprus.

The Israeli company, headquartered at Herzelia, north of Tel Aviv, said that the updated plan was expected to accelerate and reduce the cost of development.

LNG needs

Analysts say that the Aphrodite volumes are likely to be directed to the Egyptian Idku liquefaction plant east of Alexandria where Shell is the operator.

NewMed has a 30 percent shareholding in the Aphrodite licence while Shell and Chevron each own 35 percent.

NewMed’s other main asset is its large stake with partners in the Leviathan gas field offshore Israel, which is one of the largest in terms of its customer base in the East Med.

Leviathan is the subject of continuing pre-engineering work and discussions for the promotion of a Leviathan field expansion and the development of a floating LNG project.

The Leviathan field already supplies the Israeli domestic market as well as exporting pipeline gas to Egypt and Jordan.

Leviathan project shareholders are the NewMed Partnership with 45.34 percent, Chevron subsidiary, Chevron Mediterranean Ltd with 39.66 percent and Ratio Energies with 15 percent.

NewMed was formally known as Delek Drilling and changed its name to NewMed Energy in February 2022.

Italian oil and gas company Eni has followed up its agreed $4.9 billion acquisition of UK-listed Neptune Energy by buying natural gas assets from Chevron Corp. in Indonesia with LNG production potential.

Eni has agreed to buy Chevron’s interests in the Kutei Basin offshore East Kalimantan in Indonesia for an undisclosed sum.

When the deal is completed Eni will take over the Chevron operatorships in the production sharing contracts in the Indonesian Blocks named the Ganal PSC (Chevron 62 percent), the Rapak PSC (Chevron 62 percent) and the Makassar Straits PSC (Chevron 72 percent).

Eni already has a 20 percent interest as non-operator in the Ganal and Rapak Blocks.

The acquired Neptune assets include PSCs operated with Eni producing feed gas for LNG exports from the Bontang LNG plant under long-term contracts, as well as gas for the Indonesian domestic market.

Expansion

Neptune’s main stakes are in the Jangkrik and Merakes gas fields and Eni is now further strengthening its operatorships in the region where there was still “significant exploration potential” in the Kutei Basin.

The Milan-based company explained that the acquisition of the Chevron assets was an important step, particularly for the opportunity to fast-track the development of the Gendalo and Gandang gas project, a part of the Indonesia Deepwater Development (IDD) in the Ganal PSC, close to the Jangkrik Floating Production unit, with estimated natural gas reserves of around 2 trillion cubic feet.

“This is in addition to the producing Bangka gas field, the Gehem and Ranggas discoveries and the significant exploration potential also included in the northern part of the asset, which therefore represent a further relevant consolidation for Eni operations in the East Kalimantan area,” Eni added.

“The acquisition of Chevron's assets in Indonesia will allow Eni to fast-track the development of the IDD project, leveraging its strong presence in East Kalimantan as well as the synergies with Eni-operated Jangkrik infrastructures, the existing Bontang LNG facility and the domestic gas market,” Eni stated.

Eni said the acquisitions were in line with the company’s aim of increasing its share of natural gas production to 60 percent of its overall hydrocarbon total by 2030.

Eni’s first exploration agreement in Indonesia dates back to 1968 and its current net production amounts to about 80,000 barrels of oil equivalent per day.

Global gas

The company’s agreed acquisition of Neptune includes assets far beyond Indonesia and includes key global LNG stakes and gas field assets in Algeria, Norway, the UK, the Netherlands and Australia.

Under the terms of the Neptune takeover Eni agreed to purchase Neptune for $2.6Bln and Eni’s Norwegian-listed subsidiary Vår Energi has agreed to pay $2.3Bln to acquire Neptune’s operations in Norway.

Eni also explained that many of Neptune's existing natural gas contracts would expire in the next 12 months, giving the company the opportunity to integrate these within its own pipeline gas and LNG portfolio.

Neptune was owned by equity finds with China Investment Corp. holding a 49 percent stake, the US Carlyle group owning 30.6 percent and the Luxembourg-based French asset management firm CVC Partners holding 20.4 percent. 

UK major BP and Abu Dhabi National Oil Company have made a joint offer to take control of NewMed Energy, the Israeli natural gas company with LNG export plans and a supplier of pipeline gas to Israel, Egypt and Jordan.

Jan 16 (LNGJ) - NewMed Energy, a main shareholder in the largest Israeli offshore natural gas field and a likely future LNG feed-gas supplier, said it was continuing with the process of being listed on the London Stock Exchange through a reverse takeover of UK company Capricorn Energy despite a possible last-minute hold-up. This followed a request received by Capricorn from a shareholder Palliser Capital, which holds a 6.9 percent Capricorn stake, for another shareholder meeting to be convened on the same day, February 1, 2023, as one already called to approve the NewMed-Capricorn transaction.

   Palliser is calling for the replacement of most of the members of Capricorn’s board with new directors proposed by Palliser. “NewMed is continuing to promote the proposed business combination on its existing terms,” said a statement from the Israel company. “NewMed would reiterate that it continues to believe that the current terms and conditions of the proposed business combination with Capricorn are the most compelling option for all relevant stakeholders,” it added.

French major TotalEnergies confirmed its withdrawal strategy from the Yadana natural gas field in the Asian state Myanmar after Thailand’s state energy company PTTEP said it was taking over the operatorship of the gas field.

Delek Drilling, a partner in the Leviathan natural gas field, said the joint venture was finalizing a set of agreements allowing the supply of pipeline natural gas to Egypt via Jordan, using the Israeli transmission system to Jordan and the system connecting Jordan and Egypt in the area of Aqaba-Taba.

Woodside Petroleum has joined to new politicised trend for energy companies to make political investment decisions after several years of intimidation by banks and environmental activists on climate change by shutting down a natural gas project in Myanmar citing reasons of human rights.

US major Chevron Corp. and French major TotalEnergies will both withdraw from Myanmar citing worsening human rights conditions, though the national energy company of Thailand will remain for reasons of energy security and to protect the regional power needs and jobs of ordinary people.