Israel’s government said Thursday it had reached a deal with a U.S.-Israeli consortium on the development of the huge Leviathan gas field and two other offshore wells.
After weeks of talks over the government’s initial proposal in June, the controversial deal will allow Texas-based Noble Energy and Israel’s Delek Group to keep ownership of the largest offshore field, Leviathan. They are required to sell off other assets, including stakes in Tamar, another large deposit.
“The outline will bring Israel hundreds of billions of shekels in the coming years,” Prime Minister Netanyahu told a news conference, saying he will present the agreement to the cabinet on Sunday for a vote.
One change to the initial plan is that the price of gas in the new agreements will be lower, while developers will also commit to invest $1.5 billion in developing Leviathan in the next two years.
Netanyahu had been adamant in seeking a deal that would allow Leviathan — one of the largest offshore discoveries of the past decade — to be developed. He had faced a coalition crisis over details of the plan on grounds that the government gave into most of the companies’ demands and leave Noble and Delek with too much power since they would control most of Israel’s gas reserves.
Government officials argued that the current deal was the best they could achieve in ensuring there were no further delays in developing the gas field that sits 80 miles (130 km) off Israel’s Mediterranean coast.
Netanyahu earlier this week won crucial backing from the central bank chief Karnit Flug, who said that while far from ideal, it was the right move for the economy.
Leviathan, with estimated reserves of 22 trillion cubic feet (622 billion cubic meters), is to begin production in 2018 or 2019 and expected to supply billions of dollars of gas to Egypt and Jordan in addition to supplying Israel.
Energy Minister Yuval Steinitz said that years of delays of developing Leviathan, discovered in 2010, has cost Israel tens of billions of shekels.
Israel, which has gone from energy dependence to a potential exporter, currently receives its gas for electricity generation from Tamar, which began production in 2013.
“More gas and oil discoveries await us,” said Steinitz, who urged more foreign firms to invest in Israel. “There is no certainty on this matter, but there is a reasonable chance that further discoveries are waiting to be made.”