As natural gas industry leaders look toward Israel’s future export market, they urged the government on Tuesday to maintain a certain environment that will attract additional operators.

“Although it’s clear and acceptable that the government needs to regulate and set the rules, the important message from everyone in the industry here and the global industry is let’s go with the best practice of the industry,” said Yossi Abu, CEO of Delek Drilling – one of the Eastern Mediterranean exploration partners.

“Let’s not develop our own regulation that will push from Israel significant players to work elsewhere in the world.”

Abu was addressing participants in the Eastern Mediterranean Gas Conference, organized by the Houston-based Gulf Publishing Company in Tel Aviv and sponsored by a number of hydrocarbon developers, including Noble Energy, the largest firm involved in Israel’s Tamar and Leviathan reservoir partnerships.

Industry stakeholders discussed possible international outlets for Israel’s gas, all the while maintaining the need to attract additional companies to come explore and operate in the Eastern Mediterranean waters.

“If we’ll be able to have clear regulation, stability and certainty that captures the best practice of the industry, we’ll be able to push forward and go ahead with the potential of this basin,” Abu said.

Although the Israeli government approved a policy capping exports at 40 percent on June 23, 2013, the question remains to whom Israel will export the gas that has not been reserved for the domestic market.

Noble Energy holds 36% of the 282 billion cu.m. Tamar basin, which is already flowing to the domestic market, while Delek Drilling and Avner Oil Exploration – both subsidiaries of the Delek Group – each own 15.625%. Isramco owns 28.75% and Dor Gas owns 4%.

At the 535 b.cu.m. Leviathan reservoir, Noble Energy holds 39.66% of the Leviathan field, Delek Group subsidiaries Delek Drilling and Avner Oil Exploration each have 22.67% and Ratio Oil Exploration owns 15%.

Along the way toward solidifying an export policy for Israel’s basins, Noble Energy CEO Charles Davidson explained that there have been many challenges.

“Leviathan was delayed by about a year as the export policy here in Israel was put in place,” Davidson said. “Projects of this scale, of this scope, require certainty.”

Without some sense of stability, the existing partners and potential future explorers and developers cannot afford to invest billions of dollars in the market, according to Davidson.

As far as the progress of developing Leviathan is concerned, its first phase will involve securing a domestic supply and then its second phase will involve export, likely through liquefied natural gas (LNG) options, Davidson said.

Although this project is more costly and complex than Tamar in scale and scope, the basin provides “a great opportunity not only for the State of Israel but for the companies involved and for our customers,” he added.

Australian drilling firm Woodside is expected to negotiate a final agreement regarding entering the Leviathan partnership by March 27, according to a memorandum of understanding signed last month. While Davidson did not explicitly confirm that this would occur as planned, he expressed the group’s hopes “that we can bring [the Woodside] agreement to closure in the near future.”

Regarding export opportunities, Woodside’s CEO last month expressed a preference to construct a floating liquefied natural gas (F-LNG) facility off Israel’s shore for exports to Europe and Asia. Small agreements have been made with Dead Sea companies in Jordan and with a future Palestinian power provider in the West Bank, yet the partners are still evaluating larger opportunities.

Among these opportunities are the F-LNG option, a pipeline to Turkey and a shared onshore LNG facility in Cyprus.

“We believe that the characteristics of our gas could be the ultimate solution that would allow us to export F-LNG to the world and become a player to the premium market in Asia,” said Gideon Tadmor, CEO of Avner Oil Exploration and chairman of Delek Drilling.

“Now we are at the next level of potentially becoming a global player in Asia.”

Although expressing optimism for the F-LNG route, Tadmor said that the partners are “keeping all options on the table.”

While continuing gas exploration in the Eastern Mediterranean remains crucial, both Davidson and Abu emphasized the importance of searching for deep-water oil reservoirs as well.

Ideally, Davidson explained, such drilling for Mesozoic layer oils would be combined with the development of the Leviathan reservoir.

Acknowledging that the search for deep-water oil is “very high risk” and does not involve nearly the level of certainty as has the gas exploration thus far, Davidson expressed the consortium’s desire to search for these resources nonetheless.

“If you think natural gas was a game changer, finding deep oil in the Mediterranean, whether it’s Israel or Cyprus, that’s a world changer,” he said.

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