LEVIATHAN'S GAS BEGINING

PLATTS - 15 Jan 2020 - Gas exports from the giant Leviathan field project offshore Israel have now started, project partner Delek Drilling said Wednesday, marking the first energy exports from Israel.

Delek and its partners -- operator Noble Energy and Israel's Ratio Oil -- started production from Leviathan, which holds 22 Tcf (620 Bcm) of recoverable gas reserves, on December 31.

First exports to Egypt were delayed to late Tuesday, after being expected to begin shortly after the field startup.

"During the night, the flow of gas to Egypt began," Delek said in a statement.

In its first development phase, Leviathan has a production capacity of 1.2 Bcf/d (34 million cu m/d).

Gas monetization

Leviathan was discovered in 2010 but development was slow due to difficulty in monetizing the resource.

It was finally agreed in February 2018 for Leviathan gas to be exported to Egypt under a long-term contract with local Egyptian supplier Dolphinus Holdings.

The $3.6 billion Leviathan project is the second major gas field in Israel following the startup of the Noble-operated Tamar field in 2013, which continues to serve the Israeli domestic market.

Tamar will also be used to supply Egypt under the Dolphinus deal.

Israeli energy minister Yuval Steinitz said at the end of 2019 that the start-up of Leviathan and exports to Egypt would turn Israel into an energy exporter "for the first time in its history."

"This is the most significant economic cooperation between Israel and Egypt since the peace treaty between the two states was signed [in 1979]," Steinitz said.

"This is an historic milestone for Israel. The natural gas revolution makes us an energy superpower, providing huge revenue for the state," he said.

Noble holds a 39.66% stake in Leviathan, with Delek holding 45.34% and Ratio Oil 15%.

EMG pipeline

Noble and its partners first signed a supply deal with Dolphinus in February 2018 for the supply of a total of 64 Bcm of gas from Leviathan and Tamar to Egypt over a 10-year period.

The contracts in October were extended to 15 years and total volumes contracted raised to 85 Bcm, with Leviathan gas making up more of the share of the supply mix between the two fields.

Israeli gas is piped via the EMG pipeline to Egypt which has been engineered to allow reverse flows in the Israel-Egypt direction.

The line started operations in 2008 to flow Egyptian gas to Israel and ran until 2012 when operations were halted as Cairo's gas production began to decline after the Arab Spring the previous year.

The EMG pipeline has a design capacity of 7 Bcm/year -- or 19 million cu m/d.

----- 

Earlier: 

2018, July, 6, 11:30:00 ISRAELI - JORDAN GAS PIPELINE: $10 BLN BLOOMBERG - A pipeline to transport $10 billion worth of natural gas over 15 years from Israel’s Leviathan field into Jordan will be completed by the end of 2019, according to the company buying the fuel. English

2017, December, 6, 12:15:00 MEDITERRANEAN GAS FOR EUROPE PENNENERGY - significant deposits already discovered in the east Mediterranean, including Israel's Leviathan field are "just the tip of the iceberg" and that "it's very likely" that more gas will be found in Cypriot waters. English

2016, June, 20, 18:05:00 LEVIATHAN'S DEVELOPMENT According to a development plan approved this month by the energy ministry, Leviathan's three anchor customers for its phase 1 development are expected to be the domestic Israeli market, the Jordanian power company Nepco and the Egyptian consortium Dolphinus Holdings, which was supposed to purchase gas from Tamar last year in a deal that has not materialized. English