LNG

NewMed Energy, the Israeli company with stakes in the East Mediterranean gas fields, has received approval in principle to export more volumes from the prolific Leviathan field offshore Israel.

NewMed Energy, the Israeli company with stakes in the East Mediterranean gas fields like Leviathan offshore Israel and the Aphrodite field offshore Cyprus and with LNG export ambitions, reported solid earnings and steady exports to regional markets amid advances in several projects.

UK major BP and Abu Dhabi National Oil Company have decided not to proceed with 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.

A statement from NewMed said that the merger process was suspended because of the conflict in Gaza between Israeli military forces and the Hamas terrorist group and would not be proceeding in the near future.

The suspension would remain in force until discussions on an actual transaction resumed or were totally terminated.

“There can be no certainty that discussions will resume or that an agreement will be reached in the future, nor as to the terms of an agreement should one be reached,” explained NewMed.

“The NewMed Partnership will update unitholders of further developments as appropriate,” it added.

Suspension details

NewMed stated that the joint committee looking into the BP-ADNOC deal has agreed “due to the uncertainty created by the external environment” to suspend discussions in relation to the proposed transaction.

BP and ADNOC had previously made a non-binding offer in March 2023 to take NewMed Energy private and out of the Tel Aviv Stock Exchange through an acquisition of the free float listed shares and a partial acquisition of a stake still held by Israel's Delek Group.

The transaction would have resulted in BP and ADNOC holding 50 percent of NewMed Energy.

NewMed, a stakeholder with US major Chevron Corp. in the large Leviathan natural gas field offshore Israel, had previously approved budgets for 2023 including gas field development to provide feed gas for a floating LNG export project.

BP and ADNOC had intended to form a new joint venture that would have focused on “gas development in international areas of mutual interest including the East Mediterranean” region.

The proposed BP-ADNOC transaction followed a move by NewMed Energy itself to merge with Capricorn Energy of the UK but the Israelis later withdrew in February 2023 from that bid.

Main assets

The main NewMed asset, the Leviathan gas field, supplies the Israeli domestic market as well as exporting gas by pipelines to Egypt and Jordan.

The 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, which announced its name change from Delek Drilling to NewMed Energy in February 2022, also has a stake in the Aphrodite gas field in the offshore economic zone of Cyprus, making it one of the biggest players in the East Med.

Four months after the start of the Gaza conflict BP and ADNOC said in February 2024 that they had formed a joint venture in Egypt that would initially focus on natural gas and would incorporate Egyptian concession stakes held by BP.

That joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.

The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the East Med gas and LNG province after the planned acquisition of the 50 percent stake in Israel’s NewMed.

Chevron Corp., the US energy major and global LNG producer, has re-started production from the Tamar natural gas field supplying Israel, Jordan and Egypt from East Mediterranean platforms and pipelines following its closure for more than a month by the Israeli government in the wake of attacks against Israeli civilians by Hamas terrorists from the Gaza Strip.

NewMed Energy, the Israel company formally known as Delek Drilling, said it was considering a floating liquefied national gas plant to further develop the Leviathan gas field offshore Israel in the East Mediterranean amid other gas developments in the region.

Israeli company Delek Drilling, the owner of natural gas resources in the East Mediterranean, is changing its name to NewMed Energy as it expands the Leviathan gas field, increases its exposure to the LNG market and pursues exploration licences in Morocco.

Chief Executive of former Delek Drilling and now of NewMed, Yossi Abu, said that the success in production from Leviathan in the past two years, and especially the successful realization of the regional exports, had in effect turned NewMed Energy into a leading energy entity of regional importance. 

“Analyses showing the demand for natural gas (both regional and domestic) is rising constantly and justifies the expansion of production from the Leviathan field, in accordance with the approved development plans for 21 billion cubic metres annually,” said Abu.

“The second phase of Leviathan will concentrate on expansion of the infrastructures for the transmission of natural gas from the reservoir to additional consumers in its export markets along with exposure to global LNG,” stated the NewMed Energy CEO.

The company said it was also in an advanced process for the receipt of exploration licenses in Morocco as a leading partnership in its field with considerable professional knowledge and a proven track record in regional activity.

Morocco plans

“NewMed Energy has identified Morocco as a country with tremendous potential in both geological and commercial terms,” said the company.

“The board has authorized NewMed Energy's management to act, and it is currently in advanced negotiations for receiving exploration licenses in offshore Morocco, in both the Mediterranean and the North Atlantic Ocean,” stated NewMed Energy.

NewMed Energy CEO Abu said the launch of the new brand name was part of a strategic process.

“With Delek Drilling's well-known DNA, NewMed Energy will be an innovative and leading energy entity that will maximize the value of the existing core assets and promote significant processes such as the expansion of Leviathan and the development of the Aphrodite (Cyprus) reservoir, alongside the launch of exploration and production of natural gas in other countries in the Middle East,” stated the CEO.

“Exactly as Delek Drilling was, NewMed Energy will continue to be a key energy anchor in the region, with the aim of giving our investors both a stable dividend yield and growth,” Abu declared.

NewMed Energy stated that the “natural gas revolution in Israel” which continues with the Leviathan field, has led to a reduction of around 70 percent in pollution as a result of gas-fired electricity generation in Israel, and to a significant reduction in greenhouse-gas emissions.

“A reduction in air pollution can also be seen in Egypt and Jordan, countries to which gas from Leviathan is exported,” it added.

Italian energy company Eni and UK major BP announced a new natural gas discovery in the “Great Nooros Area” of the Abu Madi West Development lease in the Nile Delta offshore Egypt and coupled with other finds in the block there is potential for LNG production.

Eni said that there could be more than 4 trillion cubic feet of gas in place in the Great Nooros Area where there have been other discoveries since 2015.

The latest exploration and production success for Eni is making the East Mediterranean Basin a potential world-class gas province with other nations such as Israel and Cyprus also making discoveries in recent years.

The Nile Delta Block operator Eni said the new discovery, achieved through the Nidoco NW-1 exploratory well, is located in 16 metres of water depth and is four kilometres north from the Nooros field discovered in July 2015.

The Nidoco NW-1 exploratory well discovered gas-bearing sands for a total thickness of 100 metres.

“In the Abu Madi formations a new level, which was not yet encountered in the Nooros field, has been crossed proving the high potential of the Great Nooros Area and the further extension of the gas potential to the North of the field,” explained the Italian company.

“The preliminary evaluation of the well results, considering the extension of the reservoir towards north and the dynamic behaviour of the field, together with the recent discoveries performed in the area, indicates that the Great Nooros Area gas in place can be estimated in excess of 4 Tcf,” stated Eni.

Eni said that together with its partner BP and in coordination with the Egyptian petroleum sector, it would begin screening the development options of this new discovery and available synergies with the area's existing infrastructure.

Eni holds a 75 percent stake in the license of Abu Madi West lease, while BP owns the remaining 25 percent stake.

The Italian company’s title of operator is in conjunction with Petrobel, an equal joint venture between Eni and the state company Egyptian General Petroleum Corp. (EGPC).

Eni signed a series of agreements in March 2020 with the government of Egypt and state-owned companies to re-open the nation’s Damietta LNG export plant east of Alexandria.

The plant, a joint venture called Segas, is 40 percent-owned by Eni through Union Fenosa Gas (50 percent Eni and 50 percent Naturgy).

The facility has a nameplate capacity of 5.5 million tonnes per annum of LNG, but has been idle since November 2012 when Egypt suffered natural gas shortages.

In addition to Damietta LNG, Egypt has a second export plant, the Idku facility operated by Royal Dutch Shell and which has been back in commercial operation since 2017.

Eni’s discovery of the huge Zohr gas field in the East Med in 2015 helped transform the Arab nation’s LNG and domestic gas fortunes.  

Delek Group, a stake holder in the East Mediterranean Tamar and Leviathan natural gas fields supplying Egypt, Israel and Jordan increased revenues by 88 percent and boosted operating income.

Qatar has hosted its latest two-day Doha Forum in the Arab Gulf state where participants heard pledges from the Qataris to regain the No.1 spot in liquefied natural gas production and to boost global volumes with joint ventures such as one in the US.

Delek Group, the Israeli company developing the Leviathan gas field offshore Israel with Noble Energy of the US, confirmed the start of first gas deliveries in December and ongoing plans for a floating LNG project.