Partners approve first-phase deepwater Leviathan gas project

Noble Energy and its partners have sanctioned the first phase of the Leviathan natural gas development in the Mediterranean Sea offshore Israel.

Offshore staff

HOUSTONNoble Energy and its partners have sanctioned the first phase of the Leviathan natural gas development in the Mediterranean Sea offshore Israel.

The field contains an estimated 22 tcf recoverable – first-phase production should start by the end of 2019.

David L. Stover,Noble Energy’s chairman, president and CEO, said: “Leviathan marks our third major natural gas development offshore Israel.

“Bringing Leviathan online will expand Israel’s supply of natural gas, further support the state’s commitment to convert coal-fired power generation facilities to cleaner burning gas, and provide affordable energy resources to Israeli citizens and neighboring countries in the undersupplied region.”

The initial development will feature four subsea wells, each designed to flow more than 300 MMcf/d of natural gas.

Production will be delivered via two 73-mi (117-km) flowlines to a fixed platform with full processing capabilities, situated roughly 6 mi (9.6 km) offshore.

The initial weight of the platform deck will be 22,000 tons (19,958 metric tons). Processed gas will connect to the Israel Natural Gas Lines onshore transportation grid in the northern part of the country and to regional markets via onshore export pipelines.

The approved development plan allows for expansion from the initial 1.2 bcf/d to 2.1 bcf/d.

Noble estimates capital costs for Phase one at $3.75 billion, which includes around $100 million spent last year and a $200 million pre-investment for future platform expansion.

Front-end engineering and design is complete, the company is finalizing major project contracts, and long lead materials procurement has started.

One or two Leviathan development wells will likely be drilled this year, with completion activity for all four producer wells (including two previously drilled) anticipated during 2018.

Offshore installation should be followed by the start of commissioning in 4Q 2019, ahead of the planned year-end start-up.

Total quantities of the executed gas sales agreements, together with domestic and regional volumes under negotiation, now exceed 1 bcf/d gross.

Noble estimates Leviathan blended sales price realizations for the domestic and regional markets in the range of $5.50-$6 per MMcf, based on current Brent oil pricing.

Partners in Leviathan are Delek Drilling, Avner Oil Exploration, and Ratio Oil Exploration (1992).

02/23/2017

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