Lebanon’s gas potential off the coast is on par with the discovery of the commodity in Cyprus, Egypt and Israel, a source close to the Petroleum Administration revealed over the weekend. “The potential resources in offshore Lebanon is not less than any of the reserves discovered in the nearby countries and is similar in magnitude to the size of these discoveries,” the source told The Daily Star.
The source, who spoke on condition of anonymity, declined to disclose estimated figures of potential gas off the Lebanese coast since this information is considered classified.
International companies such as Spectrum conducted 3-D seismic surveys of most of the coast to determine the potential size of hydrocarbon deposits.
These data were sold to the international oil companies, underscoring the interest in exploring gas and oil in Lebanon.
Former Energy and Water Minister Gebran Bassil was quoted once as saying that the gas potential off the coast is close to 96 trillion cubic feet.
The source suggested that Bassil’s estimation of potential gas finds may not be far from reality in view of the extensive data collected from the 3-D seismic survey.
“We identify three levels of structures during the seismic survey. The first level is prospect, which is structure ready to be drilled and has a high probability of success. The second is the lead, which is a structure with less probability of success. The third is an area that has a probability of success less than the prospect and less than the lead,” the source explained.
He added that the first output of the 3-D seismic interpretation was more than 100 “lead” or target.
“Around 30 to 35 percent of these [leads or targets] were prospects and the remaining was lead. If we add all these elements the real value is close to the potential figure [mentioned by Bassil],” the source said.
However, he reiterated that only actual drilling would determine the proven gas reserves off the Lebanese coast.
The source stressed that a small fraction of the gas off the coast could run all of Lebanon’s power plants 24 hours a day for the next 25 years.
“If all the power plants in Lebanon were switched to gas, which is clean and cheap energy, then [the country] can operate all these power plants with 0.2 trillion cubic foot per year under the current energy consumption,” the source said.
He added that if there was a discovery of 6 TCF in one block, this could supply Lebanon with gas to run all the power plants for the next 25 years, provided that the electricity consumption did not change.
The source said one block can meet the energy needs of Lebanon.
“Once we start exploring the rest of the blocks, Lebanon will have more than enough to meet its energy needs and this will allow the country to export the rest,” the source said.
He added that Europe was an ideal export market for Lebanon once the country starts pumping gas from the fields.
“We have two ways to transport gas. The first is natural by pipeline from the field to the end user, and this is less costly than transportation fees. If we built a pipeline by land crossing to Syria and Turkey, then we will be connected to the Turkish hub which will be the center of distribution to Europe,” the source said.
He added that this option was not too costly, adding that Lebanon had an advantage over Israel if the gas was shipped by pipeline.
But the source admitted that this option could be only feasible if the geopolitical situation in Syria and the region was stable.
“But if we decided to ship gas by sea, then the cost would be extremely high and especially in transportation,” the source.
He added if the second option was adopted, then the ships would transfer the LNG to destinations such as Europe.
“It is cheaper to export gas by pipeline instead of ships. The price of gas reaching Europe through a pipeline will be cheaper than shipping the LNG to these countries,” the source said.
He added that the only advantage of the LNG is that Lebanon can export this commodity further than Europe and can reach the Far East such as Malaysia and Korea.
The source that if the Cabinet passed the two decrees on delineating the offshore blocks and laying out a model exploration and production-sharing agreement the licensing round could be launched in eight to nine months from this date. “If we signed the contracts with the oil companies today, we have between six months to one year for the companies to mobilize. This means that the company can start drilling next year.
The company will start appraising the well to see the extent of the field,” the source said.
Once the assessment is completed, the company collects all the data and embarks on development and production plan. This plan also requires the approval of the Cabinet.
“It takes one year to drill, another year for appraisal and another two to three years to hammer out a production plan and another two to three years for full production. In other word, srs,” the source said.
By Osama Habib
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