A Smaller Development Plan for Leviathan

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Noble Energy has presented the Israeli Energy Ministry with a new and reduced-in-scale development plan for the Leviathan gas field.

Noble sent the letter because of what the company described as a “fresh development” in its planning of the Leviathan gas field development. According to The Marker, a business daily, a meeting took place last week between Noble Energy executives and officials at the Energy Ministry in which Noble presented three options for the development of the Leviathan field.

It was stated that “no decision was taken concerning a chosen alternative and in any case no approval from the oil commissioner was received. However, these days the alternative examination reached a level of fruition that enabled its presentation for the first time to the oil and gas commissioner.” In the past it was a forgone conclusion that the Leviathan partnership was interested in just one alternative, with an FPSO facility and a huge export potential.

In the new alternative, Noble proposes the development of fewer wells and building a new gas rig to treat the gas offshore Israel instead of the big FPSO facility. That will probably reduce gas quantities available for export. However, it is not clear how much money will be saved, from the project’s development budget that is estimated at $6-7 billion (USD). Despite the new plans, sources at the Leviathan partnership are adamant that export is still on the cards and more export options are just opening up as Israel will get the mandatory 12 billion cubic meters that was agreed before. Noble would like to develop the field, even in a reduced scale in order to remain compliant with its lease terms.