LNG

Feb 6 (LNGJ) - CMA CGM, the French containership company based in Marseille that has the most vessels running on LNG fuel and with regular routes into East Mediterranean ports including Beirut in Lebanon, has finally ended operations in the Red Sea because of mounting security concerns.

   “CMA CGM informs its customers that until further notice, all services initially routed via the Red Sea passage will now follow the Cape of Good Hope routing,” explained the company. “The safety of our seafarers remains our priority at all times,” stated CMA CGM. The Red Sea southern approaches to the Suez Canal have been used for the past four months for attacks from Yemen on international shipping by Iran-backed terrorists.

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.

NewMed Energy, a stakeholder in the largest Israeli offshore natural gas field and a likely future LNG feed-gas supplier, said it was looking more unlikely that it would proceed with the process of being listed on the London Stock Exchange through a reverse takeover of UK company Capricorn Energy.

The expected completion date of the NewMed merger with London-listed Capricorn was the first quarter of 2023.

However, Capricorn has been caught up in a dispute with a major shareholder and has put back a meeting of all shareholders to approve the deal with NewMed.

Capricorn had previously cancelled its proposed merger with UK rival Tullow Oil in favour of the combination with Israel’s NewMed, which was first announced on September 29, 2022.

There had been plans for a $1.4 billion merger between Tullow and Capricorn, which is based in Edinburgh and was formerly known as Cairn Energy.

Among its assets, NewMed holds the rights to 45 percent of the Leviathan Israeli offshore gas field with the other major shareholder in the field being Chevron Corp.

Cyprus gas field

NewMed also has the Aphrodite gas field in Cyprus's offshore economic zone waters, making it one of the biggest players in the East Mediterranean.

In the latest merger developments, Capricorn released a statement to the London Stock Exchange whereby it had decided to adjourn Capricorn's shareholder meeting called for the purpose of approving the NewMed transaction, to February 22 instead of February 1.

An alternative shareholder meeting was called at the request of one significant Capricorn shareholder, Palliser Capital (UK) Ltd., for the replacement of the serving directors of Capricorn with new directors that were proposed by Palliser and a meeting for this purpose was then scheduled to take place on February 1 instead of a meeting to approve the NewMed deal.

Members of the board of Capricorn, including the Chairman of the board and the Chief Executive, resigned immediately from the board and it was also the intention of two other directors, including the Chief Finance Officer, to resign from the board before the February 1 meeting called at the request of Palliser.

NewMed said that in view of these developments and the resignation of most of the Capricorn board members, the probability for the closing of the UK transaction had “significantly decreased”.

The Israeli company said it was continuing to examine strategic alternatives with the aim of “maximizing value” for its own shareholders.

NewMed is currently in the midst of plans to promote the expansion of the Leviathan gas field offshore Israel and the development of the Aphrodite reservoir alongside the launch of exploration and production of natural gas in other Middle East countries.

The Leviathan gas field in addition to supplying the Israeli domestic market also supplies Egypt and Jordan with gas and has existing plans to possibly supply feed gas for liquefaction at the two Egyptian LNG plants, Idku and Damietta, located east of Alexandria.

NewMed Energy, formerly Delek Drilling and owner of the largest Israeli offshore natural gas field and a likely future LNG feed-gas supplier, is continuing with the process of being listed on the London Stock Exchange through a reverse takeover of UK company Capricorn Energy.

The kingdom of Morocco said it was considering setting up a fast-track floating LNG import terminal near the port of Tangier after Algeria carried out a threat to cut pipeline natural gas supplies to its North African neighbour, closing one of two trans-Mediterranean pipelines serving Spain.

The Israeli Energy Ministry said it asked US major Chevron Corp. to shut the Tamar natural gas field, which supplies Egypt and Jordan as well as Israel, because of continued rocket attacks on the city of Ashkelon, just 23 kilometres (14 miles) from the Tamar field’s offshore platform.

Three European energy majors and prominent LNG market participants, Total, BP and Eni have confirmed a substantial East Mediterranean natural gas discovery in the North El Hammad block located 11 kilometres offshore Egypt.

Total said that along with its partners, BP of the UK and Eni of Italy, the Bashrush well in the North El Hammad licence area encountered 102 metres net gas pay in high quality sandstones of the Abu Madi formation.

“A production test was conducted with flow rates of up to 32 million standard cubic feet of gas per day, limited by testing facilities,” said Total.

“It is estimated that future deliverability per well will be up to 100 MMscf per day, along with up to 800 barrels of condensate per day,” explained the Paris-based company.

“Future plans foresee development through tie-in to nearby existing infrastructures,” stated Total.

Kevin McLachlan, Senior Vice President Exploration at Total, said the discovery was a boost for the company, whose most prominent venture at the moment is the fully funded Mozambique LNG export project in southeast Africa,

“We are very pleased to announce this discovery in Egypt. These results support our strategy to allocate a significant share of our exploration budget to the search of hydrocarbons in the vicinity of existing infrastructures,” added McLachlan.

“These resources have low development costs since they can rapidly be tie-in and put into production,” he stated.

Total holds a working interest of 25 percent in the North El Hammad licence, alongside operator Eni with 37.5 percent and BP with 37.5 percent.

Total confirmed in July 2020 that full project financing was in place for the Mozambique LNG project using Area 1 feed-gas in the Rovuma Basin.

The joint venture companies in Mozambique have signed a $14.9-billion senior debt financing agreement proposed to construct a two-Train liquefaction plant with a total capacity of 13.1 million tonnes per annum.

Total said that the Mozambican venture represented a total post-financial investment decision outlay of $20Bln.

The Area 1 shareholding has Total as operator with a 26.5 percent participating interest alongside ENH with 15 percent.

Japan’s Mitsui & Co. owns 20 percent, India’s ONGC Videsh, Bharat PetroResources and Beas Rovuma Energy each hold 10 percent and Thailand’s PTTEP 8.5 percent.

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.

The Government of Cyprus has extended a tender deadline to September for the supply of cargoes for a floating liquefied natural gas import terminal and associated facilities currently under development.

Delek Group of Israel, the company with stakes in the giant Leviathan field in the Eastern Mediterranean set to come on stream in 2020, said it was one of the bidders for UK North Sea oil and natural gas assets being sold by Chevron Corp. of the US.