The first thing you notice when you land on a gas rig is how something that looks so small on the horizon is actually quite big, and Leviathan – the mammoth gas platform stationed off the coast of Haifa – does not disappoint.
With three main levels and pipes that seem to go on forever – leaving you to wonder how someone figured out how to connect them all – Leviathan is the largest gas rig in Israeli waters that receives gas from the country’s largest gas reservoir located well over 100 km away. The gas flows through the rig where it is cleaned and then propelled directly to Israel where it immediately powers our country.
Together with a few other Jerusalem Post writers, we visited Leviathan a few weeks ago to learn more about Israel’s gas industry and the opportunities that might exist for Israel to leverage its geopolitical standing. The reason is simple – the Russian invasion of Ukraine has opened what some in the industry call “historic opportunities” for the Jewish state to up its energy game and, in return, increase its diplomatic value and standing in the Middle East and beyond.
Ankara is heavily reliant on Russia for energy – including 45% of its natural gas and 17% of its oil. Reconciliation with Israel and improving relations is key for Turkey to be able to potentially diversify its suppliers and cut back its dependence on Russia, no longer a reliable energy source.
Until now, Eran added, Israel was not viewed as an international energy player but just as a regional one. “But now with the war in Ukraine, you can see that Israel is not unimportant,” he said.
As an example, Eran referred to US President Joe Biden’s promise in March to transfer 15 billion cubic meters (BCM) of liquefied natural gas to Europe by the end of 2022 to help with the shortfall caused by the war in Ukraine. Israel, he said, already exports about 10 BCM of natural gas to Jordan and Egypt.
The Rig
Leviathan is like an all-inclusive office/hotel. Deceptively, it houses well over 100 workers who work, sleep, eat, exercise and rest on the premises for 28 consecutive days.
Many staffers consist of Americans who fly back home for a month before returning for another month’s duty. In the staff roster during our visit, there was one female engineer present.
In the control room that reminds men of a certain age of the deck of the Starship Enterprise, personnel monitor hordes of screens, control panels, knobs and doohickeys 24/7 that control the natural gas that flows to Chevron’s clients in Israel, Egypt and Jordan.
The screens show everything – from the pressure in the pipeline that connects the rig with the well 100 km. away as well as the filtration of the gas as it goes through the endless pipes and tubes on Leviathan. The controllers receive orders from Israel Electric Corporation the night before based on the weather and assessments how hot it will be and how many people will be using air conditioning or heat.
Israel currently operates three major gas fields. Tamar was the first that was found in 2009, around 90 km. west of Haifa in the northern part of Israel’s economic waters. At the time of discovery, Tamar was estimated to contain some 240 BCM of gas reserves, an amount that can alone provide for Israel’s domestic gas consumption for several decades.
A year later, Israel made its greatest discovery when the Leviathan field was found in deep water, 30 km. west of Tamar. Initial analysis indicated it held 450 BCM but that number later went up to 500. It was at the time the largest gas discovery in the world. With success, more exploration was done and the Karish and Tanin fields were found, amounting to about 100 BCM.
A few weeks ago, Energean – a British-based company that will develop the fields – marked a major milestone with the arrival of its floating gas rig – called an FSPO – at Karish. Gas flow is expected to begin toward the end of the year.
Currently, Israel exports its gas to two countries: Jordan and Egypt, which recently increased the amount of gas it receives from Israel to meet domestic needs. Export licenses are approved by the government in coordination with commercial companies like Chevron. On the one hand, Israel has to want to sell to a specific country; on the other hand, Chevron has to see whether it can practically meet the demand.
The amounts are there. According to the Energy Ministry, Israel currently has close to 1,000 BCMs of gas reserves while the country’s own domestic needs are unlikely to exceed 500 BCM for decades to come. Assuming there is still another 500 BCM that has yet to be found – companies are already vying for exploration licenses now that Elharrar has changed her mind – and that would mean that Israel could have up to 1,000 BCM available to export to the world.
The opportunity
And this is exactly the opportunity that Israel finds itself facing – what to do with all this gas.
The primary challenge is how to get the gas from the Mediterranean to Europe. Up until a few years ago, Israel seemed to have a clear plan called the Eastern Mediterranean Pipeline (EastMed) pipeline, an ambitious and costly project that would connect the gas fields to mainland Europe in partnership with Cyprus and Greece. But then in January, the Biden administration walked away from the plan, citing economic and environmental obstacles.
This is where Turkey has stepped into the picture. After the announcement that Washington no longer supported the EastMed, Erdogan claimed that the only viable route to Europe is through Turkey.
“[If Israeli gas] would be brought to Europe, it could only be done through Turkey,” the Turkish president said at the time. “Is there any hope for now? We can sit and talk about the conditions.”
Another option would be to export to Europe via two existing liquefaction plants in Egypt and then ship it to Europe where it will be converted back into gas.
A floating liquefied natural gas (FLNG) facility is also being discussed which would allow shipments to Europe directly from Israel.
In a report presented to both Israel’s Foreign Ministry and the European Parliament, gas consultant Gina Cohen concluded that Egypt would be the quickest route to Europe while a FLNG would offer independence from any transit country. A direct pipeline would provide the cheapest end-consumer price, she said, but it take years to build.
“Israel must act as quickly as possible as the window to sign contracts and become a significant gas supplier to Europe will only be opened for a limited time,” Cohen said.
Jeff Ewing, managing director of Chevron’s Eastern Mediterranean Business Unit, said that Leviathan is capable of upping its production with new wells, added facilities on the rig and additional subsea infrastructure. Project teams, he said, are already at work drawing up options for the company to present to the State of Israel.
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