Chevron is nearing a final investment decision for a capacity expansion of the Leviathan gas field off Israel's Mediterranean coast, but is still waiting for an Israeli permit to export the gas to Egypt as part of a $35 billion deal, it said on Wednesday.
Chevron and its partners in the field, NewMed and Ratio, in August signed the largest export agreement in Israel's history, worth up to $35 billion, to supply gas to Egypt mainly via new pipelines.
But Israel's Energy Minister Eli Cohen has refused to approve the gas export agreement to Egypt until a "fair price" for Leviathan's gas for the Israeli market is agreed upon.
"We confirm that we are nearing a Final Investment Decision for potential capacity expansion of the Leviathan reservoir," Chevron said in an emailed statement.
"We will continue working with all stakeholders to create the conditions that will encourage the investments necessary to ensure that Israel and the region have the affordable energy," it said.
US PRESSURE ON ISRAEL OVER EXPORT PERMIT
Cohen's office on Friday said that U.S. Energy Secretary Chris Wright cancelled his planned visit to Israel over the issue.
"The U.S. administration has applied significant pressure on officials in Israel — including Minister Eli Cohen and the Prime Minister — in order to approve the $35-billion gas export agreement with Egypt," Cohen's ministry said.
"Since the negotiations have not yet been completed, Minister Cohen refused to approve the export until the issue is resolved."
EXPORT DEAL WOULD EASE EGYPT ENERGY CRISIS
The export deal would ease an energy crisis in Egypt, which has spent billions of dollars on importing liquefied natural gas since its own supplies fell short of demand.
Under the expansion, Leviathan, which has reserves of some 600 billion cubic metres, will sell about 130 bcm of gas to Egypt through 2040, or until all of the contract quantities are fulfilled.
Leviathan's expansion, which would cost around $2.4 billion, should allow for production and supplies to Israel and its neighbours through 2064, NewMed said in August.
Chevron holds 40% of Leviathan and is the field's operator. Tel Aviv-listed NewMed holds around 45% of the project, and Ratio 15%.
(Reuters)
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