Category: Oil and Gas business

National outline plan for the natural gas transmission system in Israel:37 A/1 – onshore southern section from Ashdod through Kiryat Gat to Ashkelon, to Beer Sheva and the Dead Sea 37 A/2 – the offshore section from Ashdod to Dor 37 A/1/4 – connection of the industrial area Rotem and Ramat Hovav 37 A/2/5 – offshore connection of the Egyptian supplier from El Arish to Ashkelon 37 B – the onshore section northwards from Gezer up to Haifa and Alon Tavor 37 C – the onshore section Dor- Hagit 37 D – the onshore section to Hadera 37 E – the offshore section to Palmahim and Shafdan

The LNG netback price, which is an export parity price that represents a domestic supplier’s opportunity cost of supplying to the domestic market when the alternative is exporting the gas as LNG, is calculated by taking the price that could be received for a quantity of the fuel and subtracting, or netting back, the costs incurred by the supplier to convert the gas to LNG and ship it to the point of delivery.

Determined by the net revenues from downstream sales, less all the costs associated with bringing the commodity to the market, excluding production and liquefaction costs.

The largest typical costs included in the calculation of LNG netback is the cost for transportation which can represent a significant proportion of the final LNG cost.

An oil distillate. Naphtha is an intermediate product between gasoline and kerosene. It is known as a light product because of the low molecular weight of the hydrocarbons making it up. Mostly used as raw material in the petrochemical industry

Nox reduction methods include the use of “low Nox burners”. These specially designed burners restrict the amount of oxygen available in the hottest part of the combustion chamber where the coal is burned. This minimizes the formation of the gas and requires less post-combustion treatment

Natural gas and oil prices are influenced by a number of issues, partially psychological in nature (speculative investments, perceived risks, government interference in oil and gas markets in the form of subsidies) and partially due to economic, political or technical factors (higher demand, tight capacity along the whole chain of supply – transport – storage – refining and the threat of interruptions). Issues on the supply and demand side that influence pricing also include weather (hurricanes that reduce supply, summer that increases road transport and the use of air-conditioning), geopolitical events in energy exporting countries, higher GDP in energy consuming countries and a host of other factors. In 2000, as natural gas was first made available in Israel at approximately $2.5 mmbtu, the price in Europe and the US averaged $3.2 and $4.2 mmbtu respectively. By 2007, the price of natural gas had increased to between $7 – $9 in the US and EU respectively, having peaked shortly to $15 mmbtu after the devastating hurricane season hit the Gulf coast of the US in the summer of 2005. During the same time period LNG costs have also shown a fourfold increase, from $2 billion to $8 billion a train. Brent crude oil which was $28.5 a barrel in 2000 hurtled past the $100 psychological barrier for the first time ever at the beginning of 2008 peaking on 11th July 2008 to $147 a barrel and decreasing after that to just above $100 a barrel by September.

Forecasts for natural gas prices for 2010 range from $4.75 per million BTUs, from Citigroup, to $9 from Sanford C. Bernstein. The disparity reflects uncertainty about a variety of factors, from whether the recent drilling breakthroughs will result in long-lasting supply growth, to whether concerns about climate change will result in a decisive move toward natural gas, which is considered a relatively environmentally friendly fuel. The end result is that while the law of supply and demand held in 2009, there isn’t any guarantee that the amount of supply or demand won’t change significantly in the future.

In the 1980s the world’s annual natural gas consumption was 42.5 bcm. In 2008 global natural gas consumption stood at 85 bcm. Reserves also took a similar path. In 1988 reserves were 110 tcm and by 2008 reserves stood at 185 tcm