Session chair Natanel Haiman, the head of the Energy and
Business Economics departments at the Manufacturers'
Association of Israel, introduced opening speaker Gina
Cohen, a prominent Eastern Mediterranean gas consultant.
Ms. Cohen spoke at length about the complexities and
interconnections of the regional gas market, and presented
options for how best to capitalize on Israel's growing gas
Israeli gas export opportunities and
challenges. Global gas trading patterns are
changing, Ms. Cohen said, as 10% of the world's gas is now
moved as LNG. Additionally, gas pricing is becoming
increasingly based on gas-on-gas fundamentals. Prices are
moving away from oil indexes and toward US Henry Hub
natural gas pricing as LNG trade ramps up. In the US,
nearly 40% of the gas produced is associated gas, making it
a cheap resource and affecting pricing fundamentals
elsewhere in the world.
"It is said that, when the US sneezes, the rest of the
world catches a cold," Ms. Cohen quipped, illustrating the
impact of low US natural gas pricing on Europe
, Asia and the
Mediterranean. In major gas-importing counties, such as
Japan and Turkey, large trade deficits create complexities
in energy trade, while in major gas-exporting nations,
export prices may increase substantially.
Ms. Cohen explained that Israel is legally required to keep
540 billion cubic meters of gas to meet domestic needs.
There are a number of export options for Israel's growing
gas reserves, including pipelines, LNG and FLNG. Ms. Cohen
said a pipeline to Jordan or Egypt is not likely to happen.
She also noted that a pipeline to Turkey, while an
attractive option, would be complicated by competition with
Azerbaijan gas pipeline shipments and by legal restrictions
arising from competition between Cyprus and Turkey to
become a regional energy hub. A pipeline to Greece is
Israel's LNG export options include onshore LNG along
Israel's Mediterranean coast, or in Eilat in the Red Sea
region; onshore LNG in Cyprus; onshore LNG in Egypt, which
already has two facilities
; an Israeli FLNG
project, which would enable the country to maintain control
over its gas and keep prices low; or FCNG, a project
concept for which investors and buyers must still be
Ms. Cohen concluded her presentation with an outline of the
easiest options from the technical, commercial and
political points of view. Technically, the easiest option
is a short pipeline to Jordan or Egypt, which would avoid
transit-country complications and enable fast transport of
Commercially, LNG could be sent to the Far East from an
onshore or offshore facility. Ms. Cohen acknowledged that
is unproven, although
it is approximately 20% cheaper than onshore LNG. From a
political point of view, the easiest option would be to
sell gas to energy-hungry Turkey, although this could be a
risky path for sellers due to the potential challenges
posed by transit countries.
The session continued with a panel discussion on LNG, FLNG,
CNG and deepwater concepts that included executive speakers
from Wood Group Mustang, Sea NG Corp. and Hiram Landau
FLNG and FCNG
Chris Barton, senior vice president of
offshore business development for Wood Group Mustang, noted
that lead times for offshore gas project
s can be extensive;
pre-FEED for an FLNG project can take 1215 months.
Influence on cost is greatest at the front end. "You don't
want a train wreck at the end" due to poor front-end
planning, Mr. Barton said. "Execution strategy is
important, and successful planning is essential."
With the progression of FLNG projects in Australia and
Southeast Asia, FLNG is becoming an increasingly viable
option for the production and export of natural gas. These
projects are setting a precedent for possible FLNG projects
in the Eastern Mediterranean, Mr. Barton said.
Next, Adam Hedayat, the vice president of business
development for Sea NG Corp. (photo 1), gave an
overview of the differences between CNG and LNG vessels and
transport. He outlined a regional niche for CNG and/or
floating CNG (FCNG) as an affordable solution for small or
stranded gas reserves to be shipped less than 3,500 km,
where pipeline and LNG shipments are impractical or too
expensive. In the Eastern Mediterranean, Mr. Hedayat sees
CNG export opportunities to Crete, Italy, Greece and
several other countries located within the optimal shipping
distance from Israel.
A question-and-answer session followed the remaining
speaker presentations, allowed Mr. Hedayat and Yigal
Landau, managing director of Hiram Landau Ltd., to debate
the pros, cons and feasibilities of FCNG and FLNG projects
with conference attendees (photo 2).
Deepwater gas pipeline design challenges.
One of the last topics covered during the session was the
technical challenges of deepwater, long-distance pipeline
projects, from both a design and installation perspective.
Jeroen Timmermans, the engineering director of INTECSEA,
explored the question of whether the technology
gap for deepwater gas
pipelines is on the verge of being closed.
Pressure, diameter and length are the primary
considerations and limitations in the hydraulic design of
deepwater pipelines. Compression system requirements are
significant in terms of construction
costs, and operators should aim to remain within proven
limits, Mr. Timmermans said.
The mechanical design of deepwater pipelines is another
essential consideration, as these pipelines must be
designed with proper wall thickness to withstand high
external pressures and pressure transitions from deepwater
to land. By contrast, shallow-water pipeline design is
mainly focused on internal pressure.
The routing of a deepwater gas pipeline is often the most
complicated design aspect of the project, Mr. Timmermans
explained. National boundaries, seabed conditions, the
overall length of the pipeline, protected areas and other
sea uses must be taken into consideration.
Survey programs for deepwater pipelines include several
phases and are critical for route confirmation, collection
of engineering data and the qualification and
quantification of geohazards. Typically, survey activities
drive the critical path for deepwater pipeline project
design, Mr. Timmermans
Deepwater pipeline options from the Levant basin in the
Eastern Mediterranean include a line to Cyprus, which would
require an approximate length of 200 kilometers (km) and be
exposed to water depths of up to 2,350 m; a line to Israel
(approximate length of 200 km and water depths of up to
1,650 m; a line to Turkey (approximate length of 500 km and
water depths of up to 2,250 m); or a line to the Greek
islands, which would require the longest and deepest route
of 750 km and water depths of up to 3,000 m.
Is the technology
gap for deepwater gas
pipelines being closed? "Yes," says Mr. Timmermans."From an
engineer's perspective, from a designer's perspective, I
think we're already there." However, he cautioned that a
strong design team must be in place to understand and
quantify the risks and geohazards associated with the
design of deepwater gas pipelines. "Large-diameter
deepwater pipelines in the Eastern Mediterranean are
challenging, but feasible," Mr. Timmermans concluded.