Gas Producer in Talks with Israeli Officials on a Smaller Leviathan Development Plan
Noble Energy has presented the Israeli Energy Ministry with a new and reduced-in-scale development plan for the Leviathan gas field. That was revealed this week during a hearing at the High Court of Justice in a petition against the construction of natural gas reception and treatment facility in central Israel.
Noble sent the letter because of what the company described as a "fresh development" in its planning of the Leviathan gas field development. According to The Marker, a business daily, a meeting took place last week between Noble Energy executives and officials at the Energy Ministry in which Noble presented three options for the development of the Leviathan field.
The letter to the High Court of Justice was sent in order to update the Court on new developments that might affect its debate. In the letter, it was stated that "no decision was taken concerning a chosen alternative and in any case no approval from the oil commissioner was received. However, these days the alternative examination reached a level of fruition that enabled its presentation for the first time to the oil and gas commissioner." In the past it was a forgone conclusion that the Leviathan partnership was interested in just one alternative, with an FPSO facility and a huge export potential.
In the new alternative, Noble proposes the development of fewer wells and building a new gas rig to treat the gas offshore Israel instead of the big FPSO facility, according to The Marker. That will probably reduce gas quantities available for export. However, it is not clear how much money will be saved, from the project's development budget that is estimated at $6-7 billion (USD). Despite the new plans, sources at the Leviathan partnership are adamant that export is still on the cards and more export options are just opening up as Israel will get the mandatory 12 billion cubic metres that was agreed before. Noble would like to develop the field, even in a reduced scale in order to remain compliant with its lease terms.
The petition to the High Court of Justice was submitted by residents of regions where the government plans to set up onshore gas reception and treatment facilities. The residents demand that gas treatment, which produces toxic by-products, would be done offshore. The High Court of Justice approved the petition partially since it hasn't addressed the gas treatment mix between offshore and onshore and instructed the National Planning Committee to review the plans and correct them within the next 18 months unless the whole planning permit will be abolished. The residents, who fought for three years to change the government policy, expressed satisfaction following the decision.
Ya'acov Zalel