Leviathan submits first-phase development plan

Leviathan

The floating facility will be able to stream up to 16 BCM of gas annually to Israel - 60% higher than Tamar.

The Leviathan partners have submitted the first phase of the development plan for the Leviathan gas field to the Ministry of National Infrastructures, Energy and Water Resources, sources inform "Globes." The first stage will include a Floating Production Storage and Offload (FPSO) facility with 16 BCM capacity for gas, which will be linked up to a pipeline connecting it to the Israeli grid.

"Globes" has also learned that the potential annual production capacity of the field will be 16 BCM, 60% higher than the Tamar field's 10 BCM. The leviathan field will have eight boreholes compared with Tamar's five.

The cost of developing the Leviathan field including the FPSO is likely to reach $6.5 billion but despite the high cost this is the option that will allow the natural gas to flow swiftly to Israel. According to the plan gas from the Leviathan field will only come on stream in early 2018 and the offshore production and processing installation will avoid the protracted amount of time it would take to get the approvals and permits for an onshore facility.

A further advantage of the FPSO plan is that if the Leviathan partners want to export gas via a marine pipeline to Turkey or Egypt, they will be able to do so swiftly and relatively cheaply. For exports to these countries, pipelines could provide a direct link without the need to first bring the gas ashore to Israel.

In March 2014, the Leviathan partners were granted the license to the field for 30 years and it was required to submit its development plan within six months. The license requires the partners to develop an infrastructure capable of supplying at least 9.2 BCM annually to Israel. The Petroleum Supervisor will permit the partners to supply less gas if other fields such as Karish and Tanin can make up the shortfall.

In addition to supplying the Israeli market, the Leviathan partners can export 50% of the field's gas (up to 75% if other fields export less and agree an exchange deal with the partners). The Leviathan partners are looking for more Israeli and overseas customers to justify developing the field.

The Leviathan partners have signed an MOU to sell 3 BCM of gas annually to Jordan for 15 years and 0.3 BCM annually to the Palestinians, as well as 7 BCM annually to BG's LNG installation in Egypt. The partners have also been considering selling liquefied gas to the Far East.

The Leviathan partners are Noble Energy Inc. (NYSE: NBL) (39.66%), Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) (22.67% each) and Ratio Oil Exploration (1992) LP (TASE:RATI.L) (15%).

Published by Globes [online], Israel business news - www.globes-online.com - on September 29, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

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