On behalf of the partners in the Leviathan offshore reservoir, Noble Energy signed a letter of intent on Wednesday to supply about 45 billion cubic meters of natural gas to Jordan’s National Electric Power Company over a 15-year period.
If the non-binding letter of intent progresses into a full-fledged deal, the Leviathan partners would likely deliver the gas supply across the land border to Jordan, Noble Energy announced. A final gas purchase and sales agreement is expected to be completed in 2014, but sales volumes will likely begin at a rate of 9 million cubic meters of gas daily, according to the Houston-based company.
Completion of the deal will be subject to the regulatory approvals of Israel and Jordan, among other conditions, Noble Energy stressed. In addition to the respective national governments, the parties are working in coordination with the US Department of State, the firm added.
“We look forward to working with NEPCO and supporting economic prosperity across the region through development of these world-class energy resources,” said Keith Elliot, Noble Energy’s senior vice president for the Eastern Mediterranean, who attended the signing along with Delek Drilling CEO Yossi Abu.
“This letter of intent and other recent regional export arrangements are advancing the first phase of development at the Leviathan project, which is being designed with capacity for 1.6 billion cubic feet [48 million cubic meters] of natural gas per day,” Elliot continued.
While Channel 2 reported that the deal is worth more than $15 billion, Noble Energy simply that the price for the gas will be based primarily on linkage to Brent oil prices, and will be dependent on negotiations for a binding agreement. The exact price is yet to be determined, but will be higher than that charged to the Israel Electric Corporation, industry sources told The Jerusalem Post.
Assuming the agreement goes through as planned, this quantity of gas will in effect supply all of Jordan’s energy needs for the next 15 years, sources said.
The 621-billion cubic meter Leviathan gas reservoir, located about 130 km. west of Haifa, is expected to begin flowing in 2017. Noble Energy owns 39.66 percent of Leviathan, while Delek Drilling and Avner Oil – both subsidiaries of the Delek Group – each own 22.67% and Ratio Oil Exploration holds 15%.
Leviathan’s smaller, 282-b.cu.m. neighbor to its east, Tamar, began generating gas for the domestic market in March 2013. At Tamar, Noble Energy holds 36% of the basin. Delek Drilling and Avner Oil Exploration each own 15.625%, while Isramco owns 28.75% and Dor Gas owns 4%.
While the government approved an export policy in June 2013, capping them to 40% of the country’s gas reserves, the question has remained to whom the developers will elect to sell the gas. Continue reading at JPost.com…