Leviathan group signs Egyptian export deal

Monday, June 30, 2014

The Leviathan field consortium has signed a preliminary deal with BG Group to export up to 3.75Tcf of natural gas over a 15-year period to the UK major’s LNG plant in Idku, Egpyt, operator Noble Energy announced.

Under the terms of the non-binding letter of intent (LOI), which partner Delek Group says was signed 27 June, around 700Mcf/d will be produced over the lifetime of the contract. Gas will be supplied through an FPSO and will be delivered through a subsea pipeline, yet to be built, which will be connected to the LNG facility.

Reuters reported through a source in Tel Aviv that the deal could be worth about US$30 billion. Delek Group said that the estimated scope of the binding agreement outlined within the LOI is 7Bcm of natural gas per year for 15 years. The Tel Aviv-based company also said that the price of the gas will be determined in an agreed-upon formula.

Noble announced on 24 April in its Q1 2014 earnings statement that recent progress made in the 19Tcf natural gas field off Israel was “remarkable,” and that the company was “close to executing a number of domestic and regional export sales agreements to support the field's development.”  Delek CEO Asaf Bartfeld said that the consortium aimed to sanction Phase I of Leviathan by YE 2014.

This is Noble’s second non-binding agreement to export Israeli gas to Egypt in a matter of months. On 5 May, the Houston-based company signed a 15-year, 2.5Tcf deal to export gas from the Tamar field to Egypt’s Damietta facility. Union Fenosa Gas owns an 80% stake in the plant. Noble Energy estimates Tamar to have 10Tcf of discovered natural gas resources.

The demand for gas in Egypt is so high that exports have nearly halted, with plants all over the country, including Damietta, stalled or being stalled due to a lack of domestic gas.

On the topic of exporting Israeli gas to geo-politically sensitive areas, Consul General of Israel to the Southwest Meir Shlomo told OE in March: “Energy by itself is not the silver bullet that will solve all the issues in the region. We know that for sure. … but peace brings prosperity, as opposed to wars that bring little prosperity. We’re hoping that will make a major contribution to the political stability of the whole region.”

Noble Energy operates the Leviathan (36.99%) and Tamar fields (36%).  Its partners in Leviathan are Delek Drilling (22.67%), Avner Oil Exploration (22.67), and Ratio Oil Exploration (1992) Ltd. Partnership (15%).

Noble Energy’s partners in Tamar are Isramco Negev 2 (28.75%), Delek Drilling (15.625%), Avner Oil Exploration (15.625%), and Dor Gas Exploration (4%).

Map of Noble Energy's Eastern Mediterranean holdings from Noble.

Read more:

Woodside retreats from Leviathan

Israel attempts to balance regulations, infrastructure

Energean named operator offshore Israel

Categories: Vessels Middle East FPSO Natural Gas

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