Partners in Israel’s Leviathan natural gas field could reach a final investment decision by the end of 2016 if government and regulatory approvals are granted as hoped, an official of the companies involved said.
That would enable the first gas from the field to reach markets by the last quarter of 2019, Bini Zomer, the Israel country manager for Noble Energy, said on Sunday.
Holding estimated reserves of 622 billion cubic meters off Israel’s Mediterranean coast, Leviathan will cost at least $6 billion to develop. It is meant to supply billions of dollars worth of gas to Egypt and Jordan, and possibly Turkey and Europe.
After years of political infighting, Prime Minister Binyamin Netanyahu signed a framework deal last month approving the development.
But the final go-ahead is in the hands of Israel’s High Court, which is expected to decide soon on its legality after opponents filed an injunction request. Critics argue that control of the country’s major gas reserves – Leviathan and a smaller field Tamar – by one consortium will limit competition.
Development of Leviathan is being led by Texas-based Noble and Israel’s Delek Group through its units Delek Drilling and Avner Oil and Gas.
“There is no doubt that the gas and oil industry is facing many challenges,” Noble’s Zomer said in a statement.
“Despite those challenges, Noble believes that the Leviathan project can move forward based on domestic and export opportunities and because of the positive climate created by the natural gas framework.”
Shares in Delek Group were up 4.7 percent in afternoon trade on Sunday in Tel Aviv while Avner and Delek Drilling stock were both up 4 percent.
Noble said last week it will slash its quarterly payout 44 percent and cut spending about 50 percent this year as the exploration and production company looks to save cash in a time of depressed crude prices.
Earlier on Sunday, the Leviathan partners said they had signed a deal to sell about $1.3 billion of gas over 18 years to Edeltech Group and its Turkish partner Zorlu Enerji for power plants they plan to build in Israel.