Noble Energy, Inc. (NYSE: NBL) today announced that it has received approval from the Petroleum Commissioner in the Ministry of National Infrastructure, Energy and Water Resources for the development of the Leviathan project offshore Israel. The approved Plan of Development (POD) contemplates 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. Leviathan is expected to provide a second source of supply and entry point into Israel’s domestic natural gas transport system, while also delivering exports to regional countries.
The Company also announced the execution of a gas sales and purchase agreement (GSPA) to supply natural gas from the Leviathan field to IPM Beer Tuvia Ltd (IPM). Under terms of the GSPA, Noble Energy and the Leviathan partners will supply a gross quantity of up to 473 billion cubic feet of natural gas to a new-build independent power facility over an 18-year term, or up to 72 million cubic feet per day (MMcf/d). The Company expects natural gas sales to IPM to commence at field startup.
The price for the natural gas is linked to the Public Utility Authority Index and includes a firm floor price. The Company expects total gross revenues under the contract to be in excess of $2.5 billion. The agreement is subject to regulatory approvals.
J. Keith Elliott, Senior Vice President, Eastern Mediterranean, commented, ‘Receiving support from the Government of Israel for the POD further builds upon recent regulatory momentum, including the Israeli Government’s approval of the revised stability language in the Natural Gas Regulatory Framework as well as the National Planning Committee’s approval of the offshore location for the Leviathan platform and pipeline connection onshore. In addition, Noble Energy and partners have made quick progress marketing natural gas to new customers. Combined with a prior executed sales agreement, we have now contracted volumes from Leviathan to the Israel market in the amount of approximately 100 MMcf/d, with substantial volumes yet to contract in Israel and the region. Strong momentum on the regulatory and marketing fronts represents major steps in advancing the Leviathan project towards final investment decision.’
Noble Energy operates Leviathan with a 39.66 percent working interest. Other interest owners are Delek Drilling with 22.67 percent, Avner Oil Exploration with 22.67 percent, and Ratio Oil Exploration (1992) Limited Partnership with the remaining 15 percent. The Leviathan field has an estimated 22 Tcf of recoverable natural gas resources.
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