Liquified Natural Gas Flow From Offshore Israel Begins Today

The Jerusalem Post wrote in an article yesterday that an offshore transmission buoy would begin operating today, supplying liquefied natural gas to Israel. Israel’s offshore Tamar gas field won’t begin production until April, but the offshore buoy is capable of supplying 4 -5 million cubic meters per day until Tamar’s production comes online. The Israeli government estimates that this new supply channel of natural gas will save the their economy 500 million NIS ($135 million) in just the first few weeks of operation, and billions in the next few years. Energy transferred from the new natural gas supply will generate 3,000 to 4,000 megawatts per hour (30,000 – 40,000 homes). This new supply is a milestone in Israel’s 80/20 goal, to have 80% of the country’s electrical energy needs supplied by natural gas. When Israel’s recent natural gas discoveries come into production they will be capable of supplying 100% of their natural gas needs without imports and export natural gas to other markets.

Read the Jerusalem Post article by clicking here.

Zion Discusses Key Geologic Features of License Area

In this video, taken at Zion Oil’s Elijah #3 wellsite on July 17, 2012, Zion Oil & Gas President/COO Victor Carrillo and Geologist Aaron Kahn discuss key features and formations on a geological map of Zion’s License areas in Israel.

Zion Oil & Gas Jordan Valley License Area

In this video, taken at Zion Oil’s Elijah #3 wellsite on July 17, 2012, Zion Oil & Gas geologist Aaron Kahn discusses the Jordan Valley License Area.

 

Zion Oil & Gas Asher Menashe License Area

In this video, taken at Zion Oil’s Elijah #3 wellsite in Northern Israel on July 17, 2012, Zion President and COO talks about Zion’s Asher-Menashe license area.

Victor Carrillo Explains the Elijah #3 Re-entry Program

Back on July 17 of this year, we shot some video with Zion Oil & Gas President and COO Victor Carrillo and Zion geologist Aaron Kahn at the Elijah #3 wellsite before they began re-entry. In this video, Victor explains the goals behind re-entering the Elijah #3 well. In light of this week’s Press Release from Zion Oil, this video, taken before the fact, is particularly meaningful.

Israel Battles Use vs Export of Natural Gas

(from “Israel to Generate 70% of Electricity from Gas by 2016, but Policymakers Lag Behind” by Malkah Fleisher, Jewish Press.com)

Recent news of a massive natural gas well have turned eyes on Israel’s struggle to adopt an energy policy in the wake of its first-time gas wealth.  Trying to measure the value of energy independence against short-term profits, Israel has shown that its unexpected blessing comes with a price.

In 2009, Tamar, located approximately 80 kilometers off the coast of Haifa, was the world’s largest natural gas discovery, endowing Israel with over 9 trillion cubic feet of natural gas.  The confetti had barely settled when Leviathan, 40 kilometers farther offshore, shocked the nation and the world with a payload double that of Tamar, and the esteemed honor of being the largest offshore natural gas discovery in the world in over ten years, and totally a grandiose 700 billion cubic metres (24.7 trillion cubic feet).

Financial and energy analysts could barely contain themselves.  Joyful predictions of long-coveted but previously inconceivable energy independence were raised, alongside the gleeful shouts of financial analysts who anticipated massive income from the export of gas.

And the battle for the mind of Israel’s government began.  Prime Minister Benjamin Netanyahu instituted a commission headed by Minister of Water and Energy Shaul Tzemach to investigate the sensibleness of exporting Israel’s new wealth of natural gas, which would supply Israeli needs for decades if kept under Israeli ownership.  His initial report recommended saving as much gas as necessary to fuel Israel through 2040.  Yet Finance Minister Yuval Steinitz pushed back, saying Israel should be allowed to export more.  So Tzemach promised a reconsideration and another report.

Yet before a report – which is due any day – could be issued, Avner, Delek, and Noble Energy companies – partners in the drilling projects and owners of the energy cache – made a quiet deal with Russia, agreeing to sell the superpower gas for the next 20 years at a fixed price – amounting to half the output of the Tamar field. (read the entire article)

Zion Oil & Gas to Re-enter the Elijah #3 Well in Northern Israel

Dallas, Texas and Caesarea, Israel – July 2, 2012 – Zion Oil & Gas, Inc. (NASDAQ GM: ZN) announced today that, on June 28, 2012, it signed an agreement with Lapidoth Israel Oil Prospectors Corp. Ltd (“Lapidoth”) regarding further exploratory work to be performed in Zion’s Asher-Menashe License area in northern Israel.

Under the terms of the workover agreement, in July 2012, Lapidoth will mobilize their Franks 750 drilling rig to Zion’s temporarily suspended Elijah #3 well. The planned work program includes re-entering the existing wellbore, partially drilling out the existing plug, acquiring electric log data via wireline, acquiring vertical seismic profile data, and possibly obtaining sidewall core samples.

Zion’s Chief Executive Officer, Richard Rinberg, said today, “The signing of the agreement with Lapidoth allows us to move forward with our exploration program in our Asher-Menashe License area. We look forward to acquiring vertical seismic profile data in this petroleum exploration area, as the additional seismic data should help us to evaluate the next steps we need to take with respect to our temporarily suspended Elijah #3 well and also to identify prospects within this license area.”

The primary purpose of the planned work is to obtain additional geologic and geophysical data and to better understand the hydrocarbon potential of a zone through which Zion drilled while drilling the Elijah #3 well in 2009/2010. The Elijah #3 well, originally planned to drill to below 17,000 feet to test both Triassic and Permian-aged geological formations, was temporarily suspended after encountering technical issues at a total depth of approximately 11,000 feet.

Zion’s President and Chief Operating Officer, Victor Carrillo, said today: “We hope to learn more about the observed oil and gas shows in a zone from approximately 8,000 to 9,000 feet that were correlated to other regional hydrocarbon shows. Zion has never sought an offset vertical seismic profile in Israel and we hope to obtain a better subsurface image of the zone near the wellbore to determine future oil prospects in this area.”

Zion Oil & Gas, a Delaware corporation, explores for oil and gas in Israel in areas located onshore between Haifa and Tel Aviv. It currently holds three petroleum exploration licenses: the Joseph License (on approximately 83,272 acres) and the Asher-Menashe License (on approximately 78,824 acres) between Netanya, in the south, and Haifa, in the north, and the Jordan Valley License (on approximately 55,845 acres), just south of the Sea of Galilee. The total license area amounts to approximately 218,000 acres

Zion Announces Plans for Two Wells in 2012

February 21, 2012, Nashville, TN

Zion President and COO, Victor Carrillo, during a press conference at the 2012 National Religious Broadcasters Convention in Nashville, announced yesterday that Zion plans to re-enter the Elijah 3 well in the Asher-Menashe Exploration territory. Carrillo stated that Zion Oil & Gas plans to re-enter the well bore late this Spring in order to evaluate the well’s production potential and to determine if the well should be completed.
Zion began drilling operations at the Elijah 3 well in October 2009. Their target depth was toward the Triassic geological formation, which was estimated below approximately 10,000 feet (3,048 meters). Zion reached a depth of 10,938 feet (3,334 meters) but temporarily suspended drilling operations in the well following unsuccessful efforts to retrieve a stuck pipe.
Carrillo also announced in yesterday’s press conference, that later this year, Zion plans to begin drilling its first well in the company’s Jordan Valley license.

Zion Oil & Gas hold the largest on-shore oil and gas exploration license area in Israel.

Noble Energy Discovers Gas Offshore Cyprus

Tamar $5 billion gas deal with Dalia Power

(from Natural Gas Asia) Delek Drilling-LP (DEDRL) and its partners in Israel’s Tamar gas field have signed a $5 billon agreement to supply Dalia Power Energies Ltd. with natural gas for 17 years.

Bloomberg reports that Tel Aviv-based Dalia Power is building a power station using natural gas at the Tzafit site in central Israel. Once completed, the plant would supply some 8 per cent of national energy consumption, making it one of the country’s biggest privately operated power stations.
Israel is encouraging the development of independent power producers to introduce competition in a market monopolized by state-owned Israel Electric Corp.
“This is one of several deals that we expect to come,” said Richard Gussow, an analyst at Deutsche Bank AG in Tel Aviv.

In November of last year, South Korean giant Daewoo signed a deal with the partners in the Tamar field, (Noble, Delek Group and Isramco Inc.) to develop the Tamar gas field. Daewoo expects to produce liquefied natural gas from the field by the end of 2016. Estimates put the field to have 240 billion cubic meters of natural gas.

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