Partners in the gas reservoir in the eastern Mediterranean have approved nearly $100 million to prepare an expansion that includes a floating liquefied natural gas (LNG) terminal off the coast of Israel.
By Erin Viner
Partners of the Leviathan field announced the initiative to increase capacity, which is aimed at producing sizeable volumes for Europe as it seeks to reduce dependence on Russian energy.
“The development plan … will enable a significant increase in production to 21 bcm a year,” said Yigal Landau, CEO of Ratio Energies.
NewMed Energy, partner with Ratio and Chevron in Leviathan, said the group will spend $45 million to plan initial production expansion and a further $51.5 million on preparations for the floating LNG terminal.
The floating facility is expected to have an annual LNG capacity of about 4.6 million tonnes, or 6.5 bcm, said NewMed.
Israel, Egypt and the European Union signed a memorandum of understanding last year for Israeli gas to be sent to Europe through LNG plants in Egypt.
Israeli Foreign Minister Eli Cohen held talks with United States Energy Envoy Amos Hochstein yesterday to discuss the potential of Jerusalem’s energy sector to help Europe as well as the Middle East, where the Jewish State hopes to normalize ties with more Arab countries.
“Some of the regional stability we aspire to comes, among other things, from stability in the energy market,” Cohen said, adding that Israel is strengthening ties with its neighbour to establish new supply chains.
It is estimated that it will take three years from a final investment decision before the extra gas begins flowing to Egyptian LNG plants and the local market, said an industry source familiar with the project. The floating LNG component will come online after that time.
“The local, regional and global markets are awaiting this move and we are working vigorously to advance it,” said NewMed CEO Yossi Abu.