Israel grants initial approval for additional gas exports from Leviathan reservoir
Energy minister says that more than doubling the quantity of natural gas exports will boost state revenue and improve diplomatic ties, while domestic energy needs will be secured
Sharon Wrobel is a tech reporter for The Times of Israel.
Israel on Wednesday gave preliminary approval to increase natural gas exports from the Leviathan reservoir off the country’s Mediterranean coast, alongside an expansion of gas supply to the domestic market.
NewMed Energy, formerly Delek Drilling (part of Yitzhak Tshuva’s Delek Group), which owns a 45.3 percent stake in Leviathan, said that the partners in the gas field are now working to approve an investment of between $400 million to $500 million to expand production capacity at the reservoir.
That’s after Israel’s Energy Ministry gave a preliminary green light for the export of an extra 118 billion cubic meters (BCM) of natural gas from the Leviathan field, in addition to the current quantity of 105 BCM allowed by the regulator for exports.
Commenting on the decision, Energy Minister Eli Cohen said that it marks another important step for strengthening Israel’s diplomatic and international ties, and expanding the supply of natural gas in the local economy to advance energy security.
The energy ministry said that the expansion will generate additional revenues for the state estimated at billions of shekels. The regulator emphasized that the partners in the Leviathan field will still be required to obtain export licenses for the additional export quantities.
Leviathan, one of the world’s largest deep-water gas discoveries, contains an estimated 22 trillion cubic feet of gas located approximately 120 kilometers west of the port city of Haifa at a water depth of 1.7 kilometers. Other partners in the gas field are US energy giant Chevron with a 39.66% stake and Ratio Oil Corp. with 15%.
Currently, a maximum capacity of up to 1.2 billion cubic feet of natural gas per day, or 12 BCM per year, is piped up from the Leviathan reservoir for the supply and sale of gas to Israel, Egypt, and Jordan.
The partners in the field said they seek to boost production output from the Leviathan reservoir to an annual quantity of about 21 BCM to meet the growing demand for natural gas for domestic market use, alongside sales to neighboring countries, and other international markets.
“The Leviathan expansion is taking shape and heralds a major development for the regional and global energy market in a period of enormous demand for natural gas,” said NewMed Energy CEO Yossi Abu. “The Leviathan reservoir is an energy hub containing a huge amount of resources, ensuring energy security for Israel alongside export to the regional market and, in the foreseeable future, also to the global market.”
A representative for Chevron in Israel said that the US energy giant is “pleased to partner with Israel, and we look forward to supporting the country’s strategy to develop its energy resources for the benefit of the country and the region.”
NewMed stated that the partners in the Leviathan site are continuing negotiations at various stages to ink agreements for the supply and sale of natural gas to the Israeli market and for exports, based both on the current production capacity and on the expanded future production output.
As part of the Plan B development plan for the Leviathan reservoir, the group is seeking to sell gas to customers beyond the Eastern Mediterranean, to Europe, and the Far East.
In June 2022, Israel, Egypt and the European Union signed a memorandum of understanding that will see Israel export its natural gas to the bloc for the first time. According to the agreement, Israeli gas will be supplied via Egypt’s liquefied natural gas (LNG) plants to the European Union.
Natural gas from Leviathan started to flow to the Israeli domestic market in December 2019. Israel’s natural gas operations have put the country on a path to energy independence — and have shielded it from the worst of the energy crisis sparked by the Russian war on Ukraine this year — in a region with few natural resources.
Both Israel and Egypt have emerged as gas exporters in recent years following major offshore discoveries, as Europe is determined to wean itself off dependence on Russian gas imports.
