Delek secures Leviathan financing

Israel’s energy firm Delek Group has secured financing for its share of the Leviathan gas field development.

The company on Tuesday said its subsidiaries Delek Drilling and Avner Oil Exploration – Limited on February 20, 2017 signed the financing documents with a consortium of local and foreign finance providers headed by HSBC Bank Plc. and J.P. Morgan Limited.

Under the agreement, the lenders will provide a limited recourse loan to each partner $875 million, which will use the funds to finance their share of the investment in the development of the Leviathan offshore gas project in the Mediterranean Sea.

Concurrently with the signing of the Financing Agreement by the Partnerships, a financing agreement was signed under the same terms and conditions and for the same purposes between the Lenders and Partnerships for receipt of a loan in the same amount. The loans to be provided to the Partnerships amount in total to $1.75 billion.

Partners in the giant Leviathan gas field offshore Israel approved the field’s development plan in December 2016, setting the target for the first natural gas production for the end of 2019.

The field is operated by the U.S. oil company Noble Energy with Israeli companies, Delek, Avner Oil, and Ratio Oil Exploration, as partners in the project.

The plan anticipates the production of 12 billion cubic meters of natural gas per year (1.2Bcf/d) at a scope of $3.5-4 billion and involves a subsea system that connects production wells to a fixed platform located offshore with tie-in onshore in the northern part of Israel.

 

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