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    Russia Seeks to Play a Leading Role in Eastern Mediterranean Gas Development

Summary

Gazprom is exploring involvement in Israels' Leviathan gas field including contributing to a partnership for the development costs of the field , the purchase of gas under long term contract for resale to the Middle East and Far East, and the development of liquefaction terminals.

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Natural Gas & LNG News, News By Country, Cyprus, Greece, Israel, Russia

Russia Seeks to Play a Leading Role in Eastern Mediterranean Gas Development

In early January, Natural Gas Europe reported that Gazprom was jockeying for a leading position in seeking to develop Cyprus’ natural gas resources. (Cyprus Gas Findings Prompts International Interest)

The discovery of significant natural gas reserves in Block 12 of Cyprus' exclusive economic zone by Noble Energy Inc., has attracted numerous international energy companies to investigate bidding for the remaining 12 offshore blocks in Cyprus' EEZ.

Russia has forged close ties with Cyprus, both in providing financial assistance and acting as an ally in regional geo-political matters.

Now Ynet, the English-language website of the Yediot Ahronot newspaper is reporting that Gazprom is attempting to build a greater footprint in the Eastern Mediterranean by courting Israel to develop a partnership in that country's offshore gas fields.

The Hebrew daily said a Gazprom team has scheduled meetings with the consortium that includes Noble and Israel's Delek Group that has discovered the Leviathan and Tamar gas fields that are reported to contain 16 trillion and 8 trillion cubic feet of gas, respectively.

Gazprom officials reportedly visited Israel in 2011 and proposed partnership options for the Leviathan field, which lies approximately 50 kilometres from the Block 12,  Cypriot offshore gas field.

Options explored included Gazprom contributing to a partnership for the development costs of the field (estimated at $6 billion-$8 billion), the purchase of gas under long term contract for resale to the Middle East and Far East, and the development of liquefaction terminals.

Israel has been supportive of gas exploration by Cyprus in its Exclusive Economic Zone and the two nations have been in discussions on cooperating on gas exploration and the joint building of a gas processing plant.

Israel's Deputy Foreign Minister recently visited Cypriot ally Greece, to talk about joint exploration of natural gas from the Mediterranean Sea.

“Greece is a strategically important country due to its proximity to us in the Eastern Mediterranean and especially due to the discovery of oil and gas,” said Danny Ayalon.

“We’re going to talk about making Greece and Cyprus distribution centres for Israeli gas to Europe, which needs to diversify its sources.”

Israel is predicting at least $150 billion in gas revenues from Tamar and Leviathan which are scheduled to begin pumping in 2013 and 2017 respectively.