March 10, 2013

Gazprom Invades the Levant

Timothy Birdnow

Russia's gas company Gazprom has inked a deal with Israel to exploit the Leviathan and Tamar gas fields.

According to the article in the Asia Times:

"Without doubt, the Tamar deal rewrites the ABC of the geopolitics of energy security. But, first of all, what are the facts on the ground?

Tamar is one of two large offshore gas fields in Israel off the coast of the port city of Haifa - the other one being Leviathan. The Tamar gas field reserves are estimated at around 270 billion cubic meters (while the potential of the Leviathan is estimated at around 450 bcm.)

The Tamar floating LNG project (FLNG), which is expected to be commissioned in 2017, is one of the first of its kind anywhere in the world and would liquefy gas from Israel's Tamar and smaller Dalit fields at a floating liquefaction vessel at rate of 3 million tons per annum, which equated to 84 bcm of gas over the 20-year period of Gazprom's deal, roughly 30% of Tamar's estimated reserves.

The deal envisages that Gazprom will provide financial support to develop the FLNG project by way of an equity investment or financing, which is expected to be significant.

The deal allows Gazprom to exclusively purchase the LNG from the Tamar project, meaning an expansion of the Russian company's LNG exports and trading portfolio. A senior Gazprom official has been quoted as saying,"

End excerpt.

Russia, which has seen her plans for energy hegemony ruined by the development of hydraulic fracturing technology and the opening of new gas and oil fields worldwide, has been in dire need of a way to get back into the game.

These Israeli gas fields are some of the richest in the world, and this will put Gazprom back in the geopolitical driver's seat.

Here is the kicker:

"However, the real significance of the deal lies in the redrawing of the geopolitics of the eastern Mediterranean region, which also happens to be currently in the cusp of the Arab Spring. The Tamar project is being implemented by a consortium dominated by Israeli companies - Delek Drilling, Avner Oil Exploration, Isramco Negev-2 and Dor Gas - in which the US oil major Noble has a 36% holding. (Noble holds a 39.7% interest in Leviathan as well.) That is to say, both Tamar and Leviathan are essentially US-Israeli ventures and Gazprom's deal could not have been forthcoming without an okay from the American and Israeli partners."

End excerpt.

Get that? American gas interests in partnership with the Israelis gave the o.k. for the Russians to get into the game. Now why do you suppose that is?

From an Israeli perspective this makes sense; America has become a shaky partner, and the Russians may be bastards, but at least they are bastards who can do it. America has become an unreliable and unstable partner. It is more proof of the declining fortunes of the United States in world affairs.

But what of the American partners. Could it be pressure from a whitewashed little cottage in a hamlet between Maryland and Virginia? Mr. Obama still believes in his "reset" policy of appeasement. Moving the Russians into the game would seem natural to him, like wiping his mouth after eating one of those ribs Michelle says nobody else should be allowed to consume. Obama SAID he'd have more flexibility with Russia after the election; is this part of that flexibility?

Interestinly enough George Soros divested himself of Noble in 2011.

But this brings up other interesting points. For instance, Russia is partnering with the Greeks in Cyprus, which is moving from a stagnant backwater to a gas-booming chunk of real estate. This is guaranteed to cause hard feelings with the Turks. And, as the Turks are moving into the Jihadist camp, it will make aggression against Israel all the more attractive.

And if European gas is dependent on this unstable region, it will force the E.U. to be more active in Middle Eastern affairs. They have largely ignored them, since they got their gas from Russia and their oil from western North Africa. This will change the equation.

If Israel becomea a powerhouse energy producer, what will the energy potentates in the region do? They already hate Israel.

We live in interesting times.

Posted by: Timothy Birdnow at 08:58 AM | Comments (2) | Add Comment
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1 Cannot blame Israel for looking into the future,and also Russia. As the ME countries move to cement the islamic ideology of enslavement it all but ends Russian influence in the area. And as you point out our foreign policy getting frigid towards Israel, they need a more reliable partner in the  future. Think about it a Russian/Israel pact would allow Russia to maybe control some of the oil fields in the ME in case the mooslims start a war with Israel. Whats our govt going to do run to the UN with a PC letter to Russia and Israel?

Posted by: Mike at March 10, 2013 06:36 PM (gCETH)

2 Agreed, Mike. What are they supposed to do?  WE certainly are no longer reliable allies. And the Russians are going to take what they can get.

Posted by: Timothy Birdnow at March 11, 2013 04:57 AM (GcmCQ)

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