Leviathan partners sign $3B gas sales deal
- Business & Finance
Partners developing the Leviathan gas field offshore Israel, have signed a deal to sell $3 billion worth of gas from the field to Israels’ IPM.
According to Israeli media, the deal was revealed during the weekend and entails the partners in the field will supply gas to IPM over the period of 18 years. The gas will be used for the power plant IPM will build at the south of Israel, approximately 60 km from Jerusalem.
The power plant will supply different consumers at the Beer Tuvia industrial zone, with any surplus electricity to be sold to other electricity consumers via the IEC grid.
Under the supply agreement the Leviathan partners will supply IPM with an overall amount of 13 billion cubic meters of natural gas.
The signing of the contract follows a recent gas framework agreement reached between the Leviathan partners and the Israeli government, which should pave the way towards the development of the giant gas field. More on that here: https://bit.ly/27D21ou
Also, the contract with IPM is the second gas sales deal Leviathan partners have signed in 2016.
To remind, the first deal worth approximately $1.3 billion for the supply of natural gas from the field to Edeltech Ltd., was signed in on January 30, 2016.
The gas will be supplied to Edeltech for the purpose of operating power plants due to be built together with its Turkish partner Zorlu, in Ashdod and Mishor Rotem.
First gas in late 2019
The Leviathan field, located in the Mediterranean Sea offshore Israel, is estimated to hold approximately 622 billion cubic meters of gas. Noble and Delek in February 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
Eight production wells will be connected by a subsea pipeline to a single platform to be built 10 kilometers offshore. According to preliminary estimates, the cost of the plan until the first flow of gas is some $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 scheduled for late 2019.
Offshore Energy Today Staff