Israel and Brunei on GAIL radar for LNG imports

Vol 15, PW 4 (25 Aug 11) Midstream & Downstream

Two countries couldn’t be more different than Israel and the Southeast Asian Islamic sultanate of Brunei.

Yet GAIL is actively courting both as potential sources of future LNG imports. PETROWATCH learns GAIL wants the oil ministry to write formal letters on its behalf to the authorities in Israel and Brunei, asking each for up to 15m t/y of long-term LNG supplies.

“On its own GAIL cannot formally approach the authorities in these countries because it is a government company,” explains a gas sector source. “This is why it has asked oil ministry officials to write letters on its behalf.

” In the past few days Israel has been trading rockets with militants in Gaza and is on the verge of a diplomatic crisis for killing three Egyptian soldiers. But GAIL executives are unconcerned by regional politics and have their eyes firmly fixed on Israel’s Tamar offshore deepwater gasfield in the Mediterranean Sea, discovered by Houston–based Noble Energy in January 2009.

A GAIL team, we learn, travelled to Jerusalem earlier this year to informally meet officials from the Natural Gas Authority department in Israel’s Ministry of Infrastructure. Also at the meeting were Noble Energy executives and Tel Aviv-based Israel Natural Gas Lines Company.

GAIL not only wants 15m t/y of LNG from Tamar but also hopes to pick up equity in the gasfield development and onshore liquefaction facility. GAIL is also actively talking to Brunei LNG, promoted by the Brunei government (50%), Shell (25%) and Mitsubishi (25%).

“GAIL has submitted a commercial offer for Brunei LNG’s consideration,” says an industry source. GAIL, he adds, believes Brunei should strongly consider India as a priority destination for LNG because of its “high economic growth rate, sustainability, reliability and proximity.

” Brunei LNG is said to be, “in the process of finalising long-term LNG buyers.”