Ratio Energies to double natural gas output to meet regional demand
Upcoming expansion likely to benefit country’s ability to export commodity to its neighbors • CEO: No excuse for usage of coal
In 2023, Ratio Energies plans to begin doubling its natural gas production capabilities by expanding the existing infrastructure of its Leviathan gas processing platform, according to CEO Yigal Landau.
In an interview with The Jerusalem Post, Landau elaborated on the company’s plan, the massive opportunity presented to the country by the current high demand for natural gas and the role that Ratio intends to play in the energy market as clean energy advancements are made.
Landau began by pointing out that 2022 was a great year for Ratio. The company saw 99% production uptime which led to it nearly producing the Leviathan platform’s maximum output capacity, which meant great success for Ratio’s income. Alongside the maxedout production, Landau said, “Revenues were up accordingly, which made us very happy.”
A combination of high supply and large demand both domestically and among Israel’s neighbors, including Jordan and especially Egypt, have served as major drivers for natural gas, and Ratio expects those factors to persist into the new year.
“There is no limit to the natural gas supply for the Israeli domestic market,” said Landau. “We have more than enough and, naturally, our aim is to sell as much gas as possible.”
In 2023, the company doesn’t plan to rest on its laurels, content with the maximum production of its current facilities. Ratio intends to begin the process of “de-bottlenecking,” as Landau put it, by doubling the physical production capacity of its Leviathan platform’s current infrastructure. For a short term output increase, the company will install a third gathering
line that runs from the gas field to the platform.
“Even though we’re currently producing at maximum capacity — we will try to stretch it even more,” said the CEO.
The upcoming expansion is likely to benefit Israel’s ability to export some of its natural gas (up to 50%, according to regulation) to its neighbors.
“We have a route supplying Egypt using the Jordanian grid. They are connected to Egypt in the south and Syria and Lebanon in the north,” Landau explained, adding that Ratio is seeking to construct another route to Egypt as well.
He noted that these export routes are high priorities for the company, as “revenues from exporting gas are much higher in terms of price per energy unit than the domestic market – which is why Israel should encourage exporting gas and using this window of opportunity for the current gas demand.”
DESPITE CLEAN ENERGY advancement LNG is still a necessary stepping stone.
Clean energy tech is one of the foremost interests to current venture capitalists, with
climate-tech taking up more than a quarter of all venture dollars invested last year, according to PwC’s State of Climate Tech 2022 report.
Despite the looming inevitability of practical clean energy solutions butting out the use of fossil fuels, Landau is confident in the current place of natural gas in the energy market — which he claims is among the best wholesale replacements for coal.
“The government promised a long time ago that they will shut down all coal powered power stations, but that hasn’t happened yet. Hopefully it will happen this year, because there is no excuse for the usage of coal, which is a massive pollutant… [Natural gas] is both less expensive and less polluting,” he said.
The CEO elaborated further: “In the future, humankind will use clean energy sources. We all want that to happen. But right now, we see the use of natural gas as an intermediate resource for energy over the next 30 or 40 years,” at which time the world’s clean energy infrastructure will likely be more capable of handling humanity’s energy requirements.
How is Ratio preparing for natural gas’ obsolescence?
In recognizing its current product as an intermediate step between the past and the future of energy production, Ratio has also recognized the need to future-proof itself by getting involved in clean energy as soon as possible.
For that reason Ratio Technology, a separate Ratio Group branch of the company, exists to explore and invest in clean energy tech. Through this subsidiary, Ratio has played a founding role in the climate-tech incubator Capital Nature, and by proxy in several noteworthy climate-tech companies such as BladeRanger and Augwind.
Landau added that Ratio Technology is “Looking at areas which are closely related to natural gas, such as carbon capture, as well as blue and green Hydrogen,” the latter terms referring to hydrogen fuel produced via carbon capture and water, respectively. “The answer is yes, we are certainly looking into exploring and promoting clean energy technology, but right now we do that in a separate branch than the one that is producing gas.”
Ultimately, the entirety of Ratio’s natural gas output depends on a steady supply of natural gas, which is located offshore. While Israeli gas companies have certainly found recent success, there is always a lingering fear that the last available deposit has been tapped.
“There is stress… even though the possibility of finding gas in Israel is relatively high. It stands in the area of 25-30% plausibility of discovery,” Landau admitted. “Still, everyone has to understand that there is a 70% risk that gas will not be found. We know of many failures in Israel’s offshore drilling that have taken place along the years… Some bitter failures, where hundreds of millions of dollars went down the drain.”
“That truly emphasizes the idea that the Israeli government should encourage more oil and gas exploration by giving benefits and stability. Stability is the key word, not changing the rules every now and then,” Landau said. “If those steps are taken, the chances are high that much more gas will be discovered offshore Israel, which is, in many regards, [a protection against] the financial crisis that other areas in the world are facing right now — at least from an energy perspective.”