LNG

If tensions between Iran and Israel escalate into a regional war scenario, it could severely impact regional oil and gas exports as well as global shipping routes. Attacks on key facilities could wipe out nearly 1.4 million bpd of Iranian production and a full-blown war would choke the Strait of Hormuz, risking up to 12 million bpd of oil, analysts warn.

Upstream activity in Iran, so far, has stayed steadfast despite fighting following Hamas’ assault on Israel in October 2023. Iran's production rose by 227,000 bpd to 3.27 million bpd in August year-on-year, while Israel’s gas output grew 15% in 2023 and is expected to rise by 5% this year, supported by the Karish field.

Some $2 billion in greenfield investment had been planned for various upstream projects in the coming years. But production at the Karish and Katlan fields could be severely reduced if regional tensions escalate, hence future production and exports are at risk.

Anticipating the future is challenging, Rystad’s Middle East research director, Aditya Saraswat noted. So far – with no direct attacks between Iran and Israel, the conflict is largely a ‘proxy war’. As of today, there have not occurred major assaults on critical oil and gas infrastructure such as pipelines, storage facilities, or refineries.

All eyes on maritime borders

If things get worse, the maritime border agreement between Israel and Lebanon, signed in October 2022, could be torn to pieces. The agreement defines each country's rights over the Karish and Qana fields, with Israel retaining full rights to Karish and Lebanon to Qana.

“Escalating tensions could lead to the nullification of this agreement, affecting Israel's production from the Karish field, which is currently used for domestic supply,” Saraswat reckons, suggesting: “This disruption may also impact Israel's gas exports to Egypt and Jordan, which saw significant growth in 2023.

“Any decline in production and exports from Karish could be offset by increased output from other major fields like Tamar and Leviathan,” he noted.

The fields hold about 88 billion cubic meters (Bcm) of cumulative proven and probable (2P) reserves. Together, they form the independent’s core area of operation – following the divestment of its Croatian, Italian, and Egyptian assets. Production from the Katlan fields (Athena and Zeus) is expected to start by 2027.

All these fields are located near the Karish field near Lebanon’s maritime border, so analyst warn that any significant unrest could delay start-up.

March 2 (LNGJ) - The 155,000 cubic metres capacity carrier “Gaslog Seattle” delivered a cargo on March 2 to the Jordanian port of Aqaba from the US Sabine Pass export plant in Louisiana, according to shipping data. The 160,000 cubic metres capacity vessel “Asia Excellence”, owned by Chevron, was unloading a cargo on March 2 at the Chinese Yangshan import terminal at Shanghai port, from Gorgon LNG in Western Australia. The 155,900 cubic metres capacity carrier “Woodside Rogers” was unloading a shipment on March 2 at Taiwan’s Yung-An terminal from Woodside Petroleum’s export facility at Dampier in Western Australia.

Noble Energy, the US company with assets in key US basins and offshore Israel, said the business progressed in the third quarter as new US wells came on stream, Israeli natural gas production hit records and the Leviathan field in the East Mediterranean advanced towards completion in 2019 when it would reduce LNG needs in Jordan.

The Tamar natural gas field in the Eastern Mediterranean, the region’s current main competitor to LNG and owned and operated by Noble Energy of the US and Delek Group of Israel, has been forced to shut down production because of a pipeline fault.

The Kingdom of Jordan is seeking the supply of more than 30 LNG cargoes in 2018 before the completion in 2019 of the Israeli Leviathan natural gas field that will send offshore pipeline gas to Israel’s Arab neighbour amounting to 35 million tonnes of LNG over 15 years.

July 6 (LNGJ) – The 174,000 cubic metres capacity carrier “Gaslog Geneva” is unloading a shipment on July 6 at the Aqaba import facility in the Kingdom of Jordan from the Bonny Island plant in Nigeria, according to shipping data. The 138,200 cubic metres capacity vessel “British Innovator”, operated by BP Shipping, will deliver a cargo on July 9 to the Quintero import terminal in Chile from the Trinidad export plant at Point Fortin in the Caribbean.

Delek Group of Israel said loan documents were signed for up to $2.5 billion for the development of the Leviathan project in the East Mediterranean offshore Israel to supply natural gas to regional customers such as LNG importer Jordan.

US company Noble Energy reported record natural gas sales to Israel from its Tamar field in the East Mediterranean where the even larger Leviathan gas field project advanced towards development and firmed up a supply deal with Jordan.

Noble Energy of the US has finalized a natural gas sales and purchase agreement to supply natural gas to the National Electric Power Company of Jordan from the from the prolific Israeli Leviathan field in the East Mediterranean.

The weight of the Middle East and North Africa countries in the global liquefied natural gas market strengthened and the region emerged as the new growth driver.