The Israeli Gas Revolution and the Emergence of the Eastern Mediterranean Gas Province

An old joke used to be told in Israel: Why did Moses so unwittingly lead the Jewish people to the land of milk and honey and not to one of its petroleum-rich neighbors?

Not anymore. In the last decade, giant gas fields have been discovered in the Eastern Mediterranean Sea offshore Israel, and offshore gas is rapidly becoming the main source of energy for power generation. Today, Israel generates 65 percent of its electricity from gas and is planning to increase that to 90 percent. In an unexpected turn of events, gas will soon be exported from Israel to the nearby Arab countries of Jordan and oil and gas-rich Egypt.

This gas revolution is a driving force in the development of the entire Eastern Mediterranean Sea, where more gas discoveries were recently found offshore Egypt and Cyprus. Israel set the development of hydrocarbon resources as a cornerstone of its energy policy, and in November 2018 announced the second bid round for exploration licenses in its economic water.

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An old joke used to be told in Israel: Why did Moses so unwittingly lead the Jewish people to the land of milk and honey and not to one of its petroleum-rich neighbors?

Not anymore. In the last decade, giant gas fields have been discovered in the Eastern Mediterranean Sea offshore Israel, and offshore gas is rapidly becoming the main source of energy for power generation. Today, Israel generates 65 percent of its electricity from gas and is planning to increase that to 90 percent. In an unexpected turn of events, gas will soon be exported from Israel to the nearby Arab countries of Jordan and oil and gas-rich Egypt.

This gas revolution is a driving force in the development of the entire Eastern Mediterranean Sea, where more gas discoveries were recently found offshore Egypt and Cyprus. Israel set the development of hydrocarbon resources as a cornerstone of its energy policy, and in November 2018 announced the second bid round for exploration licenses in its economic water.

History of Hydrocarbons

Hydrocarbon production in Israel dates back to the mid-1950s when oil was found in the Helez field in the coastal plain, some 70 kilometers south of Tel Aviv. At the time, this discovery was a source of great optimism for the young state with hopes to become another Middle Eastern oil emirate.

But, although some 18 MBBL of oil were since then produced, Helez remained the only significant hydrocarbon accumulation that was found, notwithstanding more than 40 years of continuous exploration efforts and 450 wells that were drilled onshore and offshore.

The turning point that lead to the discovery of gas offshore took place in the late 1990s. Eli Rosenberg, a veteran of the Helez field, was studying the few wells that were drilled in the offshore during the 1970s and ‘80s, which were located in shallow water and targeted oil in deep Mesozoic structures. He came to the conclusion that they missed a different type of play in shallower stratigraphic units and deeper water.

Rosenberg identified in old 2-D seismic line a series of high-amplitude reflections above the vast, Messinian Evaporite layer, which resembled gas producing reservoirs in the Nile Delta of Egypt, some 300 kilometers to the west. He suspected these anomalies to be associated with gas-charged turbidite sands of Early Pliocene age. This novel gas play was never tested before in any of the wells drilled offshore Israel.

Rosenberg and his company, Avner Oil and Gas, joined the Israeli Delek Drilling and the American-based Samedan Oil Co., later to become Noble Energy, to form the Tethys Sea Group. In 1999 the partnership drilled Noa-1 and in 2000 the MariB-1 wells; the first two gas discoveries offshore Israel. The reserves in the two fields were estimated at about 1.5 trillion cubic feet, enough to be commercially developed. In 2004 the MariB production platform, located about 25 kilometers off the coast, started to flow gas to Israel.

In the early 2000s another player was exploring in the Mediterranean Sea – the British multinational oil and gas company, BG Group. BG held several exploration permits offshore Israel and was shooting 33D seismic surveys on several attractive targets identified in regional 2-D seismic lines. One of these targets was a large four-way closure located some 80 kilometers west of the shoreline. The geology of this area was completely unknown. However, a conspicuous horizontal reflection that crossed the Tamar structure lead BG geologists to believe that this “Flat Spot” is associated with gas bearing sands below the thick, Messinian Evaporite layer. Plans to drill the Tamar structure were underway but the well, located in water depth of 1,700 meters, was estimated to be too risky and expensive and BG announced in 2005 that it was abandoning its stakes.

In came the Tethys Sea partners who purchased the BG share and joined Isramco and Dor Exploration to form the Tamar partnership. In late 2008, Noble Energy, the operator of the Tamar partnership, started to drill Tamar-1 and several months later discovered a large quantity of gas in turbidite sands of Upper Oligocene to Lower Miocene age named the Tamar Sands. The Tamar Sands play turned out to be an extremely productive target. This 200-300 meters-thick sand interval with excellent reservoir properties is widely distributed throughout the northern part of the Israeli EEZ where several large structures are found. Lead by Noble Energy, exploration drilling into the Tamar Sands continued, resulting in five more discoveries between 2010 and 2013, including the giant Leviathan Field. The total amount of recoverable gas reserves in these fields is estimated to be in excess of 30 trillion cubic feet.

Ongoing Production

The newly found gas resources offshore Israel, although located in deepwater, are rapidly being developed. The Tamar field was connected to its production platform in early 2013, only 51 months after discovery, through a 150-kilometer long tie-back pipe – at the time the longest subsea flow line in the world. Tamar is now providing for all of Israel’s domestic demand of close to 11 billion cubic meters annually. Gas from the Leviathan Field will start to flow to the shore in late 2019 and the Karish Field, now owned by Energean Oil & Gas, will be operated by a floating production facility that is planned to be installed in 2020-21.

Gas Exports

Gas from the Israeli fields will flow also to the surrounding Arab countries. Two contracts with the Jordanian National Electric Company and with an industrial facility near the Dead Sea, totaling 45 billion cubic meters of gas, were recently signed. Egypt, a major producer of gas is nevertheless in need of additional quantities for its growing domestic market and will import a total of 64 billion cubic meters from the Tamar and Leviathan fields. Two liquefied natural gas plants located in the Egyptian Nile Delta, one owned by Shell and the other by Union Fenosa, are an attractive option for export and negotiations are taking place to connect them with the Israeli gas fields.

Continued Exploration and Discovery

The activity offshore Israel was followed in 2015 with the discovery of the giant Zohr gas field by ENI in Egyptian waters in the northern extent of the Nile Delta and in early 2018 with the discovery of the Calypso gas field southwest of Cyprus. The gas was found in large carbonate buildups marking a new attractive play in this area. The Eastern Mediterranean, Levant Basin shared by Israel, Egypt, Cyprus and Lebanon is now becoming a global hotspot for exploration, driven through license offerings by all four countries. Israel just announced its second offshore bid round for five exploration zones located in the southern part of its economic water. Hopes are high that with the large quantities to be found in the Levant Basin the area will provide gas not only for the region but also to the European markets. Connecting the two areas requires the construction of the longest and deepest pipeline in the world but the prospects of having an additional source of gas are extremely appealing to the European Union leadership and feasibility studies on the East Mediterranean pipeline, carried out in cooperation between Israel, Cyprus, Greece and Italy are well underway.