Sources inform "Globes" that Israel Electric Corporation (IEC) (TASE: ELEC.B22) is mulling purchasing gas from the Leviathan partners after Noble Energy Inc. (NYSE: NBL) announced that it will begin delivering natural gas to Israel from the Leviathan field in 2016. Delivery will be regardless of the export issue, company executives said at an analysts' briefing on Thursday.
Sources also inform ''Globes'' that Noble Energy will soon publish a tender to lease a floating production, storage and offloading (FPSO) ship for the development of the Leviathan field and the delivery of gas to Israel. Early deliveries from Leviathan will help Israel alleviate the natural gas shortage expected from 2015.
The analysts' briefing was held following the publication of Noble Energy's financial report for the second quarter of 2012. The company posted a non-GAAP net profit of $145 million ($0.77 per share), below the analysts' estimates.
In response to an analyst's question, Noble Energy chairman and CEO Charles Davidson said, "The demand for gas in Israel has grown substantially. And so we see a bigger market there than probably what we saw at the time we designed Tamar. And so we are looking at a number of options of how we can provide incremental gas to the Israeli market."
Davidson added, "The other thing is that the early results from the policy committee, and we'll see what their final results are. As suggested, they do want to have split deliveries from fields, so that - it's not just a matter of Tamar supply the domestic market and Leviathan goes to export, is that we expect that on certainly the larger fields, they will be split between domestic and export. So that means that Leviathan would have a component that goes to domestic, and so we've been doing some work to see how we might develop Leviathan ahead of an export project because an export project is more long term. Ahead of an export project, that could help meet this increased demand of gas from Israel."
Asked if 2016 was a possibility for this, Davidson replied, "Oh yes, that's a possibility. And as you know, getting early production from Leviathan really boosts its value."
Published by Globes [online], Israel business news - www.globes-online.com - on July 29, 2012
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