The largest energy project in Israel’s history is well underway and has completed another crucial step towards completion. The Leviathan partnership has finished building and testing the Topsides of the rig in Texas, and it is now being shipped to Israel.
The platform consists of five separate parts, the first of which is now on its way. The parts have been in production for the past 26 months and are expected to arrive in Israel by September.
After the platform is assembled and put in place the drilling will commence and natural gas will be delivered to customers in Israel and abroad by the end of 2019.
The Leviathan Reservoir is a partnership owned by Delek Drilling (45.33%), Noble Energy (39.67%) and Ratio Oil Exploration (15%) that was established in December 2010.
The project shows great promise for the national and regional energy markets and can serve as an economic growth driver for Israel and the region.
Leviathan is one of the world’s largest deep-water natural gas discoveries found in the first decade of the 21st century. An estimated 605 BCM, or 22 trillion cubic feet, of natural gas and close to 40 million barrels of condensate have been discovered.
The development of the project has been in contention every step of the way. Since the Reservoir’s discovery, Israel’s Sheshinski Commission to examine the state’s royalties from the gas has significantly raised taxes on the project. The commission imposed a windfall profits levy, which can reach 50% of the producer’s profits once the producer recoups a certain percentage of his exploration and development costs.
Fierce opposition to the project arose in 2016, due to the alleged high price and monopoly of the companies that hold the rights to the Reservoir. In response to various regularly hurdles threatening the project, the government signed an agreement with the companies setting the path to the extraction of the natural gas that was found at The Leviathan Reservoir.
The Israeli government is expected to earn NIS 17 billion in royalties from the gas discoveries. Additionally, the windfall profits levy is expected to reach up to 10 billion a year by 2040.