Israel celebrated the end of 2019 with the beginning of production from its $3.6 billion offshore Leviathan field. The development paves the way for multi-billion dollar gas export deals with Egypt and Jordan in the coming weeks.
Texas-based Noble Energy, Israel’s Delek Drilling and Ratio Oil announced the start of operations, which effectively doubles the quantity of Israeli-produced gas. Consumer confidence in both Israeli firms lead to a surge in share prices, which are up 4.4% for Delek Drilling and 7.7% for Ratio. Ratio CEO Yigal Landau said the conglomerate believes there is strong potential for the discovery of additional major reservoirs in Israel’s exclusive economic zone (EEZ).
The Leviathan wells are located 130 kilometers west of the port city of Haifa. The gas will be transported through a subsea pipeline connected to Israel’s transmission system, and onto consumers throughout the country.
Jerusalem’s $19.5 billion export deal with Cairo is also set to begin by mid-January, involving a 15-year supply of 60 billion cubic meters (BCM) from Leviathan, and another 25.3 BCM from Israel’s nearby Tamar field. The Leviathan group also signed a $10 billion deal in 2016 to supply Jordan’s National Electric Power Company with gas.
While it is hoped that the natural gas supply will help Israel to shift away from more polluting fuels such as coal for the generation of electricity generation, others aren’t so certain. Production at Leviathan was delayed earlier this month until a court lifted a temporary injunction granted over environmental concerns, raising some doubt the project would meet is end-of-2019 timeline. Another brief delay ensued after the Environmental Protection Ministry, which monitors emissions, called for additional data from firms running the field. As the Leviathan gas began flowing, several Israelis gathered in Tel Aviv to protest against what they frear will be higher levels of pollution.