Noble Tests Leviathan Rig off Israel

Noble Energy, the operator of the Leviathan gas field off Israel, has started experimental gas flows from shore to the production rig in order to test the 10-km export line's integrity.

This phase should last up to 10 days, and if no defects are found, gas from the Leviathan field will be transmitted for the first time to the rig. It is using gas from the Tamar field, which has a similar share structure. In order to test the new facility, the Leviathan operator received an emissions permit from the ministry for the environment. 

The Leviathan partnership is expected to start gas supply to the domestic market in December and to export to Jordan either later that month or early next year. Export to Egypt by pipeline is also expected to start in January.

Earlier this year Leviathan won a $700mn tender to supply gas to Israel Electric Corp, beating one from the Tamar partnership although the price was identical in both: $4.80/mn Btu.

In order to diversify its gas sources ICE chose to award the whole contract to Leviathan, instead of dividing it into two equal parts to both. A few of the partners in Tamar, with 53% holdings collectively, appealed the decision in court but lost.

Later those partners offered ICE a better contract with a price tag of $4.30/mn Btu. But Delek Drilling and Noble Energy, with 85% of Leviathan were not interested as winning would have damaged their interests in Leviathan.

The small partners in Tamar, which hold 53% in the partnership, appealed to the the anti-trust agency, calling for the annulment of Leviathan's contract. They claim that Delek Drilling and Noble Energy, which hold 85% of Leviathan, are preferring Leviathan's interests over those of Tamar, where they are the minority.