U.S. oil and gas firm Noble Energy has managed to find another buyer for the Leviathan field gas.
According to Delek, Noble’s partner in the project located in the Mediterranean Sea offshore Israel, the Leviathan partners have signed a deal to sell gas from the Leviathan to Or Power Energies (Dalia).
The buyer will use the gas to operate a power station that it intends to set up, Delek said on Thursday.
Under the deal signed on November 30, the Leviathan partners will supply the buyer with an overall amount of 8.8 billion cubic meters of natural gas.
The agreement starts when commercial volumes of natural gas start to flow from the Leviathan field to the Or Power Energies (Dalia).
As for the value of the contract, the Leviathan partners that the amount could come to around $2 billion, however “the actual revenues will be derived from a range of factors, including the amounts of gas actually purchased by the purchaser and the electricity production price.”
Worth noting the deal is subject to several contingent terms, the main ones of which are receipt of a license for the natural gas pipeline from the Leviathan field, a Final Investment Decision by the Leviathan Partners. Additionally, Or Power needs to obtain a conditional license to produce electricity and the applicable approvals of the planning authorities for the construction of its installations. The deal is also dependent on financial completion of Or Power’s funding agreements.
As for the Leviathan field sanction, Noble Energy, the operator, in November said it had made progress towards the Final Investment Decision. The FID is now expected in early in 2017.
To remind, during the third quarter, Leviathan partners signed a large sales contract to sell gas from Leviathan to Jordan’s to the National Electric Power Company Ltd. (NEPCO).
The Leviathan development plan envisions a subsea system that connects production wells to a fixed platform located offshore with tie-in onshore in the northern part of Israel. The fixed platform’s initial capacity is anticipated to start at 1.2 billion cubic feet of natural gas per day (Bcf/d) and is expandable to 2.1 Bcf/d.
The field is estimated to hold some 22 Tcf of recoverable gross natural gas resources.
Offshore Energy Today Staff