Israel's Leviathan Notches up First Gas Sale

Israel's Leviathan Partnership announced its first sales agreement January 31 in a filing to the Tel Aviv Stock Exchange, although it is a very minor deal. The contract covers 6bn m³ over 18 years and is worth some $1.3bn. The buyer is Edeltech Group, an operator of power plants in Israel. However both sides have yet to take their final investment decisions: to develop the gas field in the first case and to build two plants in the second.

Edeltech Group is owned by Edelsburg family and Zorlu Enerji, a Turkish company.

Commentators in Israel said that the filing to the exchange of the contract details, just three days before the first hearing at the High Court of Justice of the petitions against the natural gas regulatory framework, may be intended to imply that, following the approval of the Natural Gas Framework, its implementation has already begun. The contract in itself is a small one as Leviathan Partnership seeks anchor contracts totalling at least 16bn m³/yr to make the project go ahead.

Israel's country manager for Noble Energy, Bini Zomer, said: "There is no doubt that the global oil and gas industry is facing many challenges. Despite those challenges, Noble believes that the Leviathan project can move forward based on domestic and export opportunities and because of the positive climate created by the Natural Gas Framework. With the continued cooperation and mutual commitment of the regulators, the State of Israel and the lease holders, a Final Investment Decision (FID) can be achieved by the end of 2016 with the flow of gas to domestic and regional markets within 3-4 years from FID and as early as the end of 2019 in accordance to what was articulated in the Framework and the Leviathan leases."

The high court of justice will hear petitions against the natural gas regulatory framework February 3.

Ya'acov Zalel