Noble Energy announced on Thursday that it had received approval from the Israeli authorities for the development of the Leviathan field close to Cyprus’ Aphrodite.
The news comes after Israel’s government amended the natural gas framework in late May to meet concerns from the regulator.
Leviathan’s Plan of Development (POD) was approved by the Petroleum Commissioner in the Ministry of National Infrastructure, Energy and Water Resources.
“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,” said J. Keith Elliott, Senior Vice President, Eastern Mediterranean.
“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.”
He added that momentum on the regulatory and marketing fronts “represents major steps in advancing the Leviathan project towards final investment decision.”
Noble’s plans for the development of East Mediterranean gas, including Cyprus, had been held up by the uncertainty over Leviathan.
The POD envisages 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.
Noble Energy operates Leviathan with a 39.66% working interest. Other interest owners are Delek Drilling with 22.67%, Avner Oil Exploration with 22.67%, and Ratio Oil Exploration (1992) Limited Partnership with the remaining 15%. The Leviathan field has an estimated 22 Tcf of recoverable natural gas resources.