Woodside said it has reached an agreement in principle to acquire a participating interest in one of the largest recent gas discoveries worldwide, which could see the company play a key role in the potential development of a liquefied natural gas industry in Israel.
The Leviathan Joint Venture participants, Noble Energy Mediterranean Ltd., Delek Drilling LP, Avner Oil Exploration LP and Ratio Oil Exploration (1992) LP, have reached agreement with Woodside on the key commercial terms under which Woodside will acquire a participating interest in each of the 349/Rachel and 350/Amit petroleum licences which contain the Leviathan field.
Under the agreement Woodside will acquire a 30% interest in the Leviathan field, which is estimated to contain about 17 trillion cubic feet of recoverable natural gas. The agreement will also allow Woodside to participate in further exploration opportunities in the Leviathan licences.
Woodside will be the operator of any LNG development of the field, while Noble Energy will remain upstream operator. Noble Energy targets initial production to the domestic gas market in 2016. A pre-FEED (front-end engineering and design) assessment for an LNG project is underway.
Woodside CEO Peter Coleman said the agreement was a significant step towards realising Woodside’s ambition to secure world-class growth opportunities. “We have a proven track record of safe and reliable operations in Australia and being selected as the Leviathan Joint Venture’s preferred partner in a competitive bidding process demonstrates the value of our LNG development capabilities,” Mr Coleman said.
“Acquiring an interest in these permits is an exciting opportunity to grow our portfolio in the emerging Eastern Mediterranean basin and we look forward to finalising the agreement.”
The agreement involves an initial upfront payment of US$696 million. Woodside has offered the following contingent payments:
The agreement is subject to a number of conditions including execution of fully termed agreements, completion of confirmatory due diligence and obtaining the necessary government and regulatory approvals.
[mappress] LNG World News Staff, December 03, 2012; Image: Woodside