“Israel has taken a step closer to becoming a natural gas exporter after Australia’s Woodside Petroleum Ltd signed a deal to take a 25 percent stake in the huge East Mediterranean Leviathan gas field,” reports Ynet News. “The Australian company, considered a leader in the booming liquefied natural gas (LNG) sector, signed a preliminary agreement on Thursday to buy a quarter of the Leviathan field off the coast of Israel for up to $2.55 billion.”
Excerpts from the article:
- Leviathan is estimated to hold about 19 trillion cubic feet (540 billion cubic meters) of natural gas, enough to supply all of Europe for over a year.
- The field is being developed by US-based Noble Energy Corp, which will remain the project’s lead partner with a 30 percent stake, while the other groups involved, Israel’s Delek Group, Avner Oil Exploration and Ratio Oil Exploration, will each sell one-quarter of their stakes to Woodside.
- “Woodside is one of the leading companies in the world in the … development of LNG facilities. The company brings with it rich experience … and will be a significant boost for the Leviathan partnership,” Delek Drilling and Avner said in a statement.
- Woodside sees the Leviathan project as an important part of its strategy to diversify outside of Australia. It is also considering projects in Myanmar and Ireland.
- Despite the prospect of lucrative gas exports, analysts said Leviathan would initially serve Israel’s domestic market.
- “Leviathan will be initially developed as a domestic gas project with gross production of 800 million cubic feet per day and first gas expected in 2017,” Bernstein research said on Friday in a research note.
- Once domestic supplies are up and running, Bernstein said that Woodside’s involvement in the project meant that exports in form of LNG would become more likely.
- “There will be up to 9 trillion cubic feet of gas exports. Although it remains uncertain whether gas exports will be as LNG or pipeline, Woodside’s involvement increases the probability of a floating LNG scheme.”
- Analysts said the Leviathan field may also hold significant oil reserves of up to 720 million barrels, and that drilling was expected to begin in 2015.
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