Regulator signals nod for expansion of Leviathan production

The Petroleum Commissioner at the Ministry of Energy and Infrastructure has indicated to the partners in the Leviathan offshore natural gas field that they will be allowed to significantly expand production, from 12 billion cubic meters to 21 billion cubic meters. This is not yet an export permit, but rather a response to a request from the Leviathan partners, and follows an internal examination based on data available to the ministry.

The ministry says the amount is derived “from the guidelines in government decisions regarding natural gas exports, from the work of the staff in examining the needs of the Israeli economy over the next 25 years, and is based, among other things, on the natural gas demand forecasts provided by Noga (the company that operates Israel’s electricity grid) and the Natural Gas Authority in the Ministry of Energy and Infrastructure. At this time, after the above-mentioned examination, the additional amount of natural gas available for export will be 118 billion cubic meters.”

Leviathan’s partners are currently permitted to export 107 billion cubic meters of gas, so the permit to export another 118 billion cubic meters is more than double the current amount. Neomed Energy, one of the partners in Leviathan, says that the Oil Commissioner’s letter states that, starting in 2044, exports from Leviathan will be on an uninterrupted basis, noting that at this stage the ministry does not know what the supply and demand for gas will look like as of 2044, as well as maintaining broad freedom of action. The letter states that other conditions may be imposed to ensure sufficient domestic supplies of gas in various possible future situations. It also stipulates that if the reservoir owners prove that it contains more gas than currently estimated, the commissioner will consider raising the additional permitted export amount to up to 145 billion cubic metres.

Neomed Energy said Leviathan Partners (Neomed Energy 45.34%; Chevron Mediterranean 39.66%; 15%) will soon decide to invest $400-500 million in front-end engineering and design (FEED) for the project and procure long-term elements of the development.

“The Leviathan expansion is taking shape and represents a huge boost to the regional and global energy economy at a time of high demand for natural gas,” said Yossi Abu, CEO of NewMed Energy. “The Leviathan reservoir is an energy anchor with a huge amount of resources that will ensure Israel’s energy security, alongside exports to the regional market and, in the foreseeable future, to the global market as well.”

The prices of the participating units in both NewMed and Ratio rose by more than 6% on the Tel Aviv Stock Exchange.

Published by Globes, Israel Business News – en.globes.co.il – on June 26, 2024.

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