U.S. energy major Noble Energy has said it has made progress towards the sanctioning of the giant Leviathan gas field, offshore Israel. However, the field might now be sanctioned early in 2017, instead of the previously expected fourth quarter of 2016 Final Investment Decision date.
The company, which in the third quarter signed a large sales contract to sell gas from Leviathan to Jordan, is working on making the final investment decision within the next couple of months and is aiming to secure additional sales contracts.
Gary W. Willingham, EVP Operations, said: “At Leviathan, we are continuing to target a final investment decision around year-end or early next year. We’ve now contracted up to 450 million cubic feet per day for 15 years equating to estimated gross revenues of more than $12 billion.”
Worth noting, a major part of this amount will come from the Jordan deal, around $10 billion.
It has been previously said that the first gas from the Leviathan field is expected to start in the fourth quarter of 2019. No updates have been given in Noble’s conference call on whether this is still the expected timeline for the project holding an estimated 22 Tcf of recoverable gross natural gas resources.
The Leviathan development plan envisions a subsea system that connects production wells to a fixed platform located offshore with tie-in onshore in the northern part of Israel. The fixed platform’s initial capacity is anticipated to start at 1.2 billion cubic feet of natural gas per day (Bcf/d) and is expandable to 2.1 Bcf/d.
Willingham said the Leviathan FEED work continued, with substantial progress being made with the bids and awards.
“Over the next couple of months, we expect to finalize remaining key milestones for sanction. This includes additional domestic sales contracts and financing plans, as well as completion of the engineering work, project cost estimates and required construction permits,” he said during Noble Energy’s third quarter call.
Separately, in its third quarter report, Noble Energy said work has continued on front-end engineering and design for the Leviathan production platform.
Also, the company has boasted with record gas sales volumes in Israel, averaging 313 Mmcfe/d.
Noble explained that the higher volumes were primarily driven by greater displacement of coal for natural gas in Israel’s power generation sector and growth from industrial customers, as well as strong seasonal weather demand.
While waiting for the Leviathan to be sanctioned and brought to production, Noble Energy in Israel produces gas from the Tamar offshore gas field. During the quarter, Tamar reached a cumulative 1 Tcf of gas sold since first production in 2013.
The article has been amended as it previously erroneously stated the Leviathan sanction could be expected in early 2018, instead of 2017.
Offshore Energy Today Staff