Page 5 - MEOG Week 48 2022

MEOG COMMENTARY MEOG

Additionally, Uniper said, the partners will early November that its short-term plans for
consider a plan for using Israeli gas to boost co-operation with NewMed would focus on
LNG exports to Germany. This would involve piping Israeli production to Egypt and on mak-
the expansion of existing Phase 1B infrastruc- ing use of existing gas liquefaction plants. It also
ture at the Leviathan field and sending additional indicated that the partners had yet to decide
volumes of gas either to the Idku and Damietta whether to install a new-build FLNG in Israeli
LNG plants in Egypt or to a new-build floating waters further down the road or continue mak-
LNG (FLNG) facility that would be installed in ing use of the Idku and Damietta LNG plants.
Israel, it explained. Since then, however, NewMed has offered
The statement also said that the partners also some hints about its own preferences. Abu said
envisioned future co-operation in the area of during a conference call discussing his compa-
hydrogen fuel. “In line with NewMed Energy’s ny’s third-quarter results on November 24 that
strategic plan, according to which the partner- NewMed was “really keen” to develop an FLNG
ship is aimed at promoting green energy, the solution for Leviathan and wanted to start work
MoU also includes potential collaboration in “very soon” on a pre-front end engineering and
the field of blue hydrogen and green hydrogen design (FEED) study. The goal is to make a final
and its transportation from Israel to Europe,” it investment decision (FID) on expanding Levi-
noted. athan’s production capacity from 12bn cubic
Niek den Hollander, Uniper’s CCO, empha- metres per year to 14 bcm per year “as soon as
sised the environmental benefits of the deal, say- we can,” he declared.
ing: “This collaboration with NewMed Energy Abu clarified his statements in a conversation
fits our strategy of diversifying our gas supply with Reuters later on November 24, saying that
sources and paving the way to a decarbonised NewMed wanted to take an FID in early 2023.
world. Sourcing natural gas from offshore Israel He also described the FLNG plan for gas exports
has the potential to increase security of supply beyond the near term as “really where we are
for Germany.” heading right now.”
Meanwhile, Yossi Abu, the CEO of NewMed, In other words, NewMed does appear to be
stressed the importance of gas to energy markets looking beyond Egypt with respect to export
in Europe and other regions. “For the foreseea- routes for Israeli gas. It will probably take sev-
ble future, natural gas will be the most signifi- eral years to build the FLNG needed to imple-
cant energy source in the world,” he remarked. ment such a solution – and certainly in the near
“NewMed Energy is continuing to promote its term, it appears to anticipate working more with
international activity. Leviathan is an energy Egypt, as well as another of Israel’s neighbours.
anchor in the Middle East, supplying energy to (“In 2023 we will significantly speed up Levia-
Israel and other countries in the region, while than’s expansion and entry into new markets,
also being able to help in the energy crisis in while strengthening the collaboration with our
Europe.” customers in Israel, Egypt and Jordan,” Abu told
Reuters.)
NewMed leaning toward FLNG? Once the FLNG is in place, however, Israel
Uniper’s announcement does not seem to be a will have another option for sending gas to
sign of immediate changes in the pipeline for Europe. It will probably still need to collaborate
Israel’s largest gas field. with Egypt due to capacity constraints, but it will
After all, the German company did say in gain flexibility through diversification.™

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