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EMGC '17: Eni chief shares invigorating projections for Eastern Med gas

By Adrienne Blume, Editor, Gas Processing and Executive Editor, Hydrocarbon Processing

NICOSIA—Gulf Publishing Company's Eastern Mediterranean Gas Conference (EMGC) 2017, the fourth incarnation of the world's primary event for discussing the forces shaping gas industry development in the Eastern Med, opened on March 14.

Luca Bertelli (pictured), Chief Exploration Officer of Italy's eni SpA, opened EMGC 2017 with a keynote address on key gas exploration and development activities in the region, particularly eni's massive Zohr field in Egypt.

Bertelli Emgc Small
Photo by Adrienne Blume.

A decade of discovery. "We call the Eastern Mediterranean the 'sea of gas'," Mr. Bertelli said. Eni has been discovering gas in the region for fifty years, starting in the Nile Delta and Egypt's shallow waters. The Italian company partnered with British BP for exploration activities in the early 1980s.

The next significant discovery announcements were made by Noble Energy in 2009 and 2010, when Noble discovered the Leviathan field offshore Israel. Noble took final investment decision (FID) on Leviathan in February 2017. First gas is expected by the end of 2019, giving the development a 34-month execution time line.

The Tamar field also was discovered in 2009. FID was taken in September 2010, and first gas was produced in April 2013—an execution time line of 30 months. An FID has not yet been taken for the Aphrodite field, discovered offshore Cyprus in 2011.

Eni discovered the Zohr field offshore Egypt in 2015, replacing Leviathan as the Eastern Med's largest gas field to date. Discovered reserved are estimated at 30 Tcf, and each well delivers 200 MMscfd–250 MMscfd of gas. Eni took FID on Zohr in February 2016, and it expects to produce first gas by the end of 2017—a rapid execution time line of 22 months.

Bright prospects for future E&P. "History has been made by brave companies that have tried new ideas and accepted new challenges to bring Eastern Mediterranean gas to the surface," Mr. Bertelli acknowledged. "But how much gas is still to be discovered?"

The exploration chief cited many estimates, ranging anywhere from 100 Tcf–300 Tcf of additional gas. "We believe 100 Tcf is a solid number that we must target," Mr. Bertelli said.

However, the exec noted, "There are still a lot of untested plays in the Eastern Med," and that large discoveries from 2009 onward will elevate the region to "a new, emerging gas province of worldwide relevance."

Thus far, subsea tie-in to an onshore or nearshore platform is the preferred concept for Eastern Med gas developments. Subsea tie-ins with these configurations have lower CAPEX and OPEX requirements and can be quickly executed, as in the case of the Leviathan, Tamar and Zohr fields.

Building a regional gas export hub. The Eastern Med has several advantages that would make it an ideal gas production, processing and export center. Infrastructure exists and is already in operation, including two LNG terminals in Egypt and several pipelines. Mr. Bertelli noted that Eastern Med gas will be prioritized to meet domestic demand first, and exports will come second.

To determine if enough gas will be available for export after meeting domestic market demand, the logic is to first maximize existing liquefaction capacity in Egypt to monetize existing reserves. However, the construction of new export pipelines will require massive investments and political acceptance by various states, Mr. Bertelli cautioned.

"Therefore, further investments in exploration are required to secure additional volumes, before an export route to Europe via pipeline can be considered a viable option."

Mr. Bertelli also noted that, in case of massive new discoveries offshore Cyprus, new LNG infrastructure could be developed on the island nation. Large discoveries are possible, as several of Cyprus' exploration blocks share borders with Egypt's massive Zohr field, which has revamped interest in the Eastern Med.

According to Mr. Bertelli, the Zohr development is attracting important new players to the region, which contributes to additional large investments in seismic prospecting and drilling.

Eni's race with Zohr, and the potential for more. "We took some risk with Zohr because there was a strong political commitment from the Egyptian government to start [gas] flowing a soon as possible," Mr. Bertelli remarked. "So, we moved full speed ahead with the project."

Eni has drilled seven wells at the field, and construction of an onshore processing platform is on track. First gas, expected by the end of 2017, will start with 1 Bcmd of production.

If more plays like Zohr are discovered, it could add volumes to the Eastern Med gas creaming curve. Most of the Zohr-like prospects are believed to be contained within the Exclusive Economic Zone (EEZ) of Cyprus, the Eni exploration chief said.

The Zohr discovery triggered a third licensing round by Cyprus in 1Q 2016. The country offered three blocks, with select bidders consisting of eni (Block 8), eni and Total (Block 6) and ExxonMobil and Qatar Petroleum (Block 10).

Other new opportunities are cropping up in the region. Lebanon is offering its first large offshore bidding round in 2017, consisting of five blocks. Also, Israel has offered 24 blocks in competitive bidding rounds, with bids scheduled to be submitted by April 21, 2017.

Potential for domestic and international supply security. In conclusion, Mr. Bertelli said that the giant gas discoveries in the Eastern Med have the potential to ensure long-term, strategic security of supply to key countries such as Egypt, Israel and Cyprus. Unlocked potential exists in other areas that could ensure security of supply for other countries in the region, including Lebanon.

Huge potential also exists to provide energy to the EU and Turkish markets. The use of existing LNG plants (particularly those with idled capacity, such as Egypt's Idku terminal) and regional pipelines provide good starting points for potential gas export and distribution routes, Mr. Bertelli said.

The exploration chief emphasized that new pipeline connections will require political cooperation, which will compel regional governments to work closely with their neighbors.

EMGC 2017 continues. Stay tuned for more exciting coverage of EMGC 2017 in Nicosia, Cyprus, which takes place March 14–15.


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