Chevron Leaning Toward Floating LNG in East Med

Chevron hopes to outline next year its favored export option for its gas reserves offshore Israel and Cyprus, some two years after it entered the East Mediterranean gas play. The US supermajor has taken its time to select the best route to global markets for a second phase development of its 22 trillion cubic foot Leviathan offshore field and its 4 Tcf Cypriot Aphrodite field. Options include piping the gas subsea to either of Egypt’s twin liquefaction plants at Idku and Damietta on the Mediterranean coast; a floating LNG vessel or even a planned East Med gas pipeline. Chevron insists all options remain on the table, but industry sources increasingly believe that floating LNG will come out on top. This week, Chevron confirmed that it had reached a final investment decision (FID) on a two-phase capacity expansion of its 11 Tcf Israeli Tamar gas field, aiming to boost output from 1.1 billion cubic feet per day to 1.6 Bcf/d by 2025. Phase one involves construction of a third 150 km pipe running from the Tamar field to the existing platform that will hike production to 1.2 Bcf/d, with work to be completed by early 2025. Phase two requires a new sales agreement with private Egyptian firm Dolphinus and “transportation agreements via enhanced gas transportation routes between Israel and Egypt,” Chevron said in a statement. Phase 2 FID will require regulatory approvals and an export permit from Israel.