Bulgaria Wants to Buy Gas From Israel

Industry | January 31, 2018, Wednesday // 16:45|  views


Bulgaria would be interested in buying Israeli gas if the EastMed pipeline connecting Leviathan to Europe is built.

Bulgarian Minister of Energy Temenuzhka Petkova has told Israeli Minister of National Infrastructure, Energy, and Water Resources Yuval Steinitz that Bulgaria was interested in buying natural gas from Israel through the Greek hookup to a natural gas pipeline from Israel to Europe. Petkova announced that Bulgaria was planning to build a gas pipeline in cooperation with Greece that would connect Bulgaria to the EastMed project.

The Bulgarian minister, who heads the European forum of energy ministers, invited Steinitz to take part in a meeting of the European energy ministers in Bulgaria this coming April

Bulgaria currently buys most of its natural gas from Russian company Gazprom. Like all the European countries, Bulgaria would like to diversify its sources of natural gas. Connecting Bulgaria to Steinitz's initiative is no simple matter; it probably requires laying a land-based pipeline between Greece and Bulgaria.

The EastMed project for laying an pipeline from the Leviathan natural gas reservoir to Italy via Greece has passed one European Union (EU) hurdle with the EU's allocation of €34.5 million this year for completion of planning ahead of a final decision about investment in the project in 2019.

35% of the development work on the Leviathan reservoir has been completed. Construction of a gas pipeline to transport the gas from the handling platform to the Dor shore has ended, and the company has also begun preparations for the arrival of the new ENSCO DS 7 drilling platform in Israel in March, the Leviathan partners have announced.

Development of the Leviathan reservoir, Israel's largest natural gas project, got underway a year ago. According to the most recent announcement by Delek Drilling Limited Partnership (TASE: DEDR.L), natural gas from Leviathan will begin reaching the economy in late 2019, matching the company's previous predictions.

he partners say that many Israeli companies are quite involved in the construction and development of the Leviathan platform, including Ham-Let Nazareth Illit, Habonim, Inbal Valves, Upper Galilee company Amiad Metal Technologies, and Kibbutz Ein Dor-based company Teldor. These companies are developing and manufacturing the pipeline parts (adaptors and valves), special water filters, and so forth for the platform.

The new Ensco drilling ship won a tender published by Noble Energy for completion of drilling in the two production wells in Leviathan (Leviathan 7 and Leviathan 3), and for connection and completion of work on the four Leviathan wells to be connected to the production system as part of the development plan for the reservoir (Leviathan drillings 3, 4, 5, and 7).

The cost of the ship is $140,000 a day. For the sake of comparison, the cost of the previous ship was $200,000.

The Leviathan development plan (Stage 1A) provides for production drillings to be connected through an undersea pipeline to the permanent platform, which will be located 10 kilometers from the Hadera shore. The platform will be placed on the sea bottom at a depth of 80 meters, and will produce 12 BCM annually. The gas from the platform will run through a pipeline to the Israel Natural Gas Lines Company's national transportation system, from where it will be sent to customers in Israel and neighboring countries. The cost of the first stage is estimated at $3.75 billion.

The second state in Leviathan's development has yet to be submitted for approval, because gas supply agreements have not yet been reached. There are several options, for none of which has a concrete agreement been reached so far. These options include exports to Egypt, Turkey, the European pipeline through which Israel can export gas to Greece and Italy, and as reported recently in "Globes," an energy-intensive aluminum production plant being considered in southern Israel that will consume 2 BCM annually.

Development of the second stage of Leviathan is due to be combined with development of the Aphrodite Cypriot gas reservoir, located only 30 kilometers away from Leviathan, in order to lower development costs and make it possible to make do with only one drilling platform. Aphrodite, which contains 120 BCM of gas, has not been developed since it was discovered in 2012. Cyprus, whose potential consumption is estimated at 1 BCM annually, is still using polluting fuel oil to produce electricity.


Source: Israel Business News

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Tags: EastMed pipeline, gas, pipeline, Israel, Temenuzhka Petkova, buy


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