New discoveries and higher oil prices have set off a quest for exploring for more gas in the Eastern Mediterranean, with Lebanon among the latest to join the race.
The country, which has been historically energy deficit and dependent on fuel imports that added to its debts, launched its first licensing round for offshore gas in 2017, with exploration work set to begin this year by consortium led by French energy major Total.
In May, the Lebanese Petroleum Authority, the government agency overseeing the upstream licensing rounds announced plans for a second one this year.
Egypt and Jordan, meanwhile, have both finalised gas supply agreements from the Leviathan field in the Mediterranean Sea, operated by the US-based Noble Energy.
Khaled Z Irani, a former Jordanian energy minister, said that imported gas supplies would be critical to ensuring power requirements are adequately met.
Jordan, which sits on top of some of the world’s largest oil shale reserves will look to develop them in tandem with its ongoing renewable energy programme. The country could also potentially tap Lebanese gas, if discovered and developed, via a planned Iran-Iraq-Syria pipeline that may link with Lebanon.
"It's always an option because the pipeline has reached Syria. This will be a good network to be able to import and export within the whole region," Malek Kabariti, also a former minister for energy in Jordan, told The National.
“Already more than 70 per cent of electricity is produced using imported gas," he said.
Attarat Power, a Jordanian affiliate of Estonian-owned Enefit, announced in March that its plan to build a $2.1 billion oil shale-fired power plant in Jordan had secured financing from a consortium of Chinese banks.
"The direct burning electricity plant has already been commissioned. Jordan will continuously import gas not only to produce electricity but also to develop a network for municipal use and industry,” Mr Irani said.
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Stephen Fullerton, research analyst, Mena upstream at Wood Mackenzie, said hopes of turning gas into cash was driving ambitions in the region.
"At the moment in the East Med there is a dash to commercialise gas discoveries. Large volumes of gas have been discovered in Egypt ... and Cyprus, with all companies involved looking for export routes.
“There is exploration ongoing in the region as well, which has the potential to yield yet more discoveries,” he added.
Plans for exploration come on the back of large-scale discoveries in the Eastern Mediterranean that have become game-changers for the economies of Egypt and Cyprus. A 2010 US Geological Survey estimated that the Levant Basin in the Eastern Mediterranean could hold as much 122 trillion cubic feet of gas, which equals the total reserves of Iraq, the Middle East’s second-largest crude producer.
Early interest in the potential for Levantine gas followed discoveries of the Tamar and Leviathan gasfields at the turn of the decade. Egypt followed suit, with Italian major Eni striking gold in 2015 when it discovered the Zohr gasfield, which has the potential to put an end to the North African state’s power woes and transform it into a gas export hub. Eni is also pushing ahead with exploration work this year in the Nur field off the coast of Sinai, which some suggest could hold up to three times the volumes of gas in Zohr, which is itself estimated to hold 850 billon cubic feet of gas. Eni, which has had a successful exploratory venture in the Mediterranean, announced in February that it had found a “Zohr like” gas discovery offshore Cyprus, which could potentially yield promising amounts of gas.
Lebanon, which prioritised its stalled gas exploration programme soon after it formed a government early last year, received bids by a consortium of Total, Eni and Russia’s Novatek.
While the initial round cannot be described as “successful”, it is not surprising that Lebanon had chosen to initiate a second round this year as oil prices surged to three-year highs, noted Carole Nakhle, chief executive at London-based Crystol Energy.
“[Lebanon] managed to attract one consortium of oil majors. This reduces the risk perception for other investors who may now be more encouraged to bid,” Ms Nahle said.