The petroleum commissioner at the Ministry of Energy and Infrastructure has indicated to the partners in the Leviathan offshore natural gas reservoir that they will be allowed to expand production substantially, from 12 BCM (billion cubic meters) to 21 BCM. This not yet an export permit, but a response to an approach by the Leviathan partners, and follows an internal examination on the basis of existing data held by the ministry.
The ministry states that the quantity derives "from the guidelines in government decisions on natural gas exports, and from staff work examining the needs of the Israeli economy over the next 25 years, and is based upon, among other things, forecasts of demand for natural gas presented by Noga (the company that manages Israel’s power grid) and the Natural Gas Authority in the Ministry of Energy and Infrastructure. At this time, after the aforementioned examination, the additional amount of natural gas available for export will be 118 BCM."
The Leviathan partners are currently allowed to export 107 BCM of gas, so that a permit to export another 118 BCM more than doubles the existing quantity. NewMed Energy, one of the partners in Leviathan, says that the letter from the petroleum commissioner states that from 2044, exports from Leviathan will be on an interruptible basis, indicating that at this stage the ministry does not know what the supply of and demand for gas will look like from 2044, and so is keeping wide discretion. The letter states that further conditions may be imposed in order to ensure an adequate local supply of gas in various possible future situations. It also states that if the reservoir’s owners demonstrate that it holds more gas than currently estimated, the commissioner will consider raising the additional export quantity allowed to as much as 145 BCM.
NewMed Energy reports that the Leviathan partners (NewMed Energy 45.34%; Chevron Mediterranean 39.66%; Ratio 15%) will shortly decide on an investment of $400-500 million in front end engineering and design (FEED) for the project and procurement of long-lead items for development.
"The expansion of Leviathan is taking shape, and represents a massive boost to the regional and global energy economy in a period of huge demand for natural gas," said NewMed Energy CEO Yossi Abu. "The Leviathan reservoir is an energy anchor with a huge quantity of resources that ensures Israel’s energy security, alongside exports to the regional market and, in the foreseeable future, to the global market as well."
Prices of participation units in both NewMed and Ratio are up by more than 6% on the Tel Aviv Stock Exchange.
Published by Globes, Israel business news - en.globes.co.il - on June 26, 2024.
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