Energy Ministry approves Leviathan development plan

Leviathan drilling photo: Channel 10
Leviathan drilling photo: Channel 10

The plan is designed to enable gas to flow from the Leviathan reservoir to the Israeli domestic market in 2019.

The Petroleum Commissioner at the Ministry of National Infrastructures, Energy and Water Resources has informed the partners in the Leviathan gas reservoir (Delek Drilling - 22.67%, Avner Oil & Gas - 22.67%, Noble Energy - 39.66%, and Ratio - 15%), that approves the plan for development of Leviathan submitted to him three months ago.

Under the plan, which is for the largest infrastructure project in Israel's history, the reservoir will be developed according to an accelerated timetable that enable the gas from it to reach Israeli users by the end of 2019, earlier than the date set in the gas framework agreement between the state and the gas exploration companies. The Leviathan partners aim to approve a final investment decision this year.

The development plan calls for the drilling of eight production wells (of which two have already been drilled) to be connected by a submarine pipeline to a fixed maritime platform on which all the systems for treating the gas will be installed. The gas will flow from the platform to the shore at the northern entry point of the Israel Natural Gas Lines network.

The production, treatment and transportation capacity of the wells, the platform and the pipeline between them is planned to be 21 BCM a year, while the capacity of the pipeline from the platform to the connection point with Israel Natural Gas Lines is panned to be 12 BCM a year. The gas supplied to Israel Natural Gas Lines will serve the local Israeli economy and neighboring countries. The platform will also have an additional outlet for connection to a submarine pipeline with a capacity of 12 BCM a year, mainly for exports to countries of the region.

The Ministry of National Infrastructures, Energy and Water Resources estimates the amount of gas that can be produced from the reservoir at 17.6 TCF. This estimate will be updated if further data are received, particularly after the Leviathan-5 drilling, and in accordance with data obtained in the course of production, for the purposes of calculating the amount of gas that may be exported.

As far as the partnership is concerned, there has been no change in the resource estimate for the Leviathan reservoir in the report prepared by Netherland, Sewell & Associates, according to which the reservoir contains 21.9 TCF of natural gas. These figures confirm the report by "Globes" two months ago that the ministry's estimate of teh amount of gas in the reservoir is 20% less than that of the partnership.

Delek Drilling CEO Yossi Abu said, "We welcome the approval of the development plan, which represents a significant stage on the way to developing the Leviathan field. We are proceeding along three parallel tracks in order to ensure a flow of gas in 2019: firstly, on the technical side, approval of the plan enables us to proceed with the detailed planning of the project; on the commercial plane, we are at the height of negotiations on the signing of additional gas supply agreements, both domestic and for export; and on the financial plane, we are making progress with a financing plan such that we will be able to make an investment decision by the end of 2016."

Published by Globes [online], Israel business news - - on June 2, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Leviathan drilling photo: Channel 10
Leviathan drilling photo: Channel 10
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