U.S. energy company Noble Energy and its Israeli partner Delek, have reportedly reached an agreement with the Israeli government, which should pave the way towards the development of the giant Leviathan gas field, offshore Israel.
One point in the previously agreed framework for the 22 TCF gas development was objected by Israel’s High Court in March. The court said that the stability section of the agreement, with the purpose of “the existence of a stable regulatory environment” could not stand, as it would prevent regulatory changes for a decade, and had to be reorganized. The court gave one year for the amendment to take place.
According to a Reuters report on Wednesday, Israel’s finance minister Yuval Steinitz said the new agreement was reached, which will provide more room for the government to make regulatory changes in the natural gas sector if needed. He said that the deal was expected to be ratified soon.
The news agency further cited Noble Energy, which reportedly said that the agreement was an important milestone towards creating stable investment climate.
Plan submitted, first client secured
To remind, late in January 2016, a first agreement was signed by Leviathan partners and a local off-taker, Edeltech Ltd. for the for the provision of 6BCM of natural gas (over 18 years) for power plants which it intends to build, together with its Turkish partner Zorlu, in Ashdod and Mishor Rotem. The total revenues were estimated at approximately $1.3 billion.
A month later, on February 25, 2016, the Leviathan partners submitted a revised development plan with a capacity of 21 BCM per year. Eight production wells will be connected by a subsea pipeline to a single platform to be built 10km offshore. According to preliminary estimates, the cost of the plan until first flow of gas, is approximately $5-6 billion, lower than the estimated $ 6-7 billion cost in the original development plan.
According to the plan submitted in February, the final investment decision is expected in the fourth quarter of 2016, with first gas from the Leviathan slated for late 2019.
Offshore Energy Today Staff