After two months of uncertainty, Leviathan operator Noble Energy Inc. (NYSE: NBL) has committed to develop the offshore gas field. The US company's Israeli partners, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) notified the Tel Aviv Stock Exchange (TASE) this morning that Noble Energy had made a final commitment towards the $3.75 billion first stage development of the field. The commitment comes two months overdue because of Noble's desire to ensure that the contract to supply 3 billion cubic meters (BCM) of gas to Jordan over 15 years would go ahead.
The development will include four production wells, a gas handling platform, and pipeline to Israel's coast, capable of providing 12 BCM annually for Israel, Jordan and the Palestinian Authority. Contracts have been signed to supply only 4.5 BCM annually but the Leviathan partners are confident that more contracts will be obtained.
Avner and Delek Drilling, which each hold 22.67% of Leviathan, have signed a $1.75 billion financing loan deal from a consortium of banks led by JP Morgan and HSBC. Noble Energy owns 39.66% of the field and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%.
Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz said, "As I have already committed to, the Leviathan gas field will be developed on my watch. We will all have profits in revenues to the State, cleaner air for us and our children and increased energy security. The final investment decision by Noble and the other partners puts an end to the claims by those opposed to the gas outline agreement who have tried to block it throughout the process. If we continue to move forward responsibly and determinedly, we will succeed in discovering more gas fields and positioning Israel as an important player in the energy market for our neighbors in the Middle East and Europe."
Noble Energy Israel country manager Bini Zomer said, "Over the last couple of years, the State of Israel has made great strides to establish the conditions necessary to allow energy companies to make investments in developing the country’s natural resources. Today, Israel is reaping the fruits of those efforts. Development of the Leviathan project is another milestone in the fulfillment of Israel’s energy security and will bring benefits in the air quality and health of Israel’s citizens who will also benefit from increased government revenues and from a path to better relations with their neighbors in the region."
He added, "Noble Energy is proud to be the leader in the development of Israel’s oil and gas sector and thanks the people of Israel for the faith given to us by them and their government. We are committed to working in partnership with the relevant regulatory bodies in order to achieve our target of first gas flow before the end of 2019."
Published by Globes [online], Israel business news - www.globes-online.com - on February 23, 2017
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