Reuters: Israel risks delay in becoming big gas exporter due to tax dispute

A tax dispute between Israel and Australia's Woodside threatens to delay gas production from the flagship Leviathan field, while the government is also forcing oil firms to spend more on pipelines than they expected.

Israel is preparing to become a supplier of liquefied natural gas (LNG) around the end of the decade, when Qatar, Australia, Russia and North America are also boosting their presence in the market. Timing will be important to securing market share.

By bringing in Woodside, an LNG specialist, to take a quarter stake worth up to $2.7 billion, the U.S.-Israeli group of oil companies developing the project and its 540 billion cubic meters of reserves are looking to access a broader market, especially in Asia.

In the tax dispute, the government wants to depreciate Woodside's initial $1.2 billion investment over the 30-year lifespan of the Leviathan field, while the company argues for a shorter 10-year term, a source close to the talks said.

A shorter depreciation period shields more of Woodside's investment from tax. At stake is a sum of up to $100 million, a source at one of Woodside's partners said, meaning it is unlikely to be a deal-breaker. MORE

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