The NewMed Energy group has upgraded the estimated value of the mammoth Leviathan gas reservoir to $12.5 billion once a third subsea pipeline is built. The project is expected to boost production and export sales by 2025.
The company released the assessment in a filing submitted Sunday to the Tel Aviv Stock Exchange (TASE).
The partners in the project are planning to invest $562 million for construction of a third subsea transmission pipeline from the gas reservoir to the platform that is expected to increase supplies of the precious resource beginning in 2025.
The consortium is predicting a NIS 52 billion ($14 billion) infusion into Israel’s sovereign wealth fund in the next ten years from the Leviathan and Tamar natural gas fields.
NewMed Energy (formerly Delek Group) is the largest stakeholder in the Leviathan offshore gas project, holding 45.34 percent of the shares. Next largest is Chevron (formerly Noble Energy), which holds 39.66 percent, followed by Ratio Oil Corp. which holds 15 percent of the working interest in the 330 square kilometer gas field.
Leviathan is located in the Israeli exclusive economic zone (EEZ), approximately 130 kilometers off the shores of Haifa. It contains an estimated 22 trillion cubic feet of natural gas in a field that is 1.7 kilometers under the sea.
Production in the field is currently facilitated by four subsea wells that are connected, via a subsea manifold and two 120 kilometer long pipelines, to an offshore platform, where all processing of gas takes place. From the platform the gas is piped to shore into the Israeli national grid, through which it is distributed to clients in Israel, Egypt and Jordan.
NewMed Energy CEO Yossi Abu told a Knesset committee last month that the company is also promoting plans for a liquified natural gas (LNG) terminal to boost exports.
“From today until 2033, an amount of about 52 billion shekels will accumulate in the wealth fund just from the Tamar and Leviathan reservoirs,” he told Israeli lawmakers.
“”We are working around the clock as Leviathan partners to develop an independent LNG export facility to export natural gas from Israel,” he said.
“The next stage in exports is the construction of a floating liquefaction facility, which is planned as part of the expansion of the Leviathan field and will allow Israel to export gas to European and parts of Asia,” Abu explained. “This is the most economical and successful solution that will be an alternative to expensive and long pipelines.”
The cost of building such a plant is estimated at more than $2 billion; liquefaction will begin once construction is complete, with tankers taking the liquified gas to European ports and later to markets in Asia.
Export volumes will be set only after all the needs of the Israeli economy are met, Abu added.
