Israeli Leviathan natural gas field partners consider marketing options including LNG

Thursday, 11 April 2019
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Delek Group of Israel is discussing liquefied natural gas marketing possibilities for the giant Leviathan field in the Eastern Mediterranean currently under development and set to come on stream in 2020.

Delek Drilling is the largest shareholder in the Leviathan field and is looking into several options for some of the 22 trillion cubic feet of natural gas in the field that has not already been sold to pipeline customers in Israel and Jordan.

These include Delek sending volumes by an existing pipeline to Egypt for domestic use or as feed-gas for one of Egypt’s LNG export plants at Damietta or Idku, or setting up its own floating LNG infrastructure.

The Israeli company owns more than 45 percent of the Leviathan field while US company Noble Energy is the operator with just short of 40 percent. The balance is held by  stock exchange shareholders.

Firm pipeline supply agreements have already been signed for the Leviathan project with buyers such as Jordan’s National Electric Power Company, set to take 45 billion cubic metres in a deal lasting at least 15 years.

Another Leviathan supply deal has been signed by Israeli company Edeltech, which is buying the gas for power plants it owns with Turkish partner Zorlu Energy in Ashdod and Mishor Rotem.

Delek and Noble have also signed letters of intent to supply Leviathan natural gas to customers in Egypt such as Dolphinus Holdings and the operator of the Idku LNG export plant, now Royal Dutch Shell.

The Israeli media has also reported that ExxonMobil was interested in setting up a floating LNG option for the Leviathan project partners to join. The reports explained that while talks with ExxonMobil had taken place, it was too early to say if any agreement was likely.

ExxonMobil and Middle East LNG partner Qatar Petroleum have also recently made a large natural gas discovery in the East Med offshore Cyprus.

The ExxonMobil-QP discovery is at the Glaucus-1 well located in their exploration Block 10 in Cypriot waters.

Based on preliminary estimates the ExxonMobil resources are between 5 Tcf and 8 Tcf, enough feed-gas for a small-scale FLNG project.

Another possibility for the Israelis and Noble is transporting some Leviathan gas volumes to the Egyptian Idku LNG export plant.

Idku is east of the city of Alexandria and first came on stream in 2005 and has capacity to ship up to 7.2 million tonnes per annum from two liquefaction Trains. It also has two storage tanks with a combined capacity of 280,000 cubic metres.

Idku is now operated by Shell and has been on stream again since 2017 as new Egyptian discoveries turned a natural gas deficit into a surplus. Shell acquired its Idku stake when it completed the takeover of BG Group in 2016.

Egypt’s second LNG export plant at Damietta is still idle, but the resolution of a legal dispute between the owners and the Egyptian government has now been resolved.

The facility has capacity of 5.5 MTPA of output and has two storage tanks each of 150,000 cubic metres capacity.

Damietta is owned by Union Fenosa Gas, a joint venture between Spain’s Gas Natural, now known as Naturgy, and Italian energy company Eni. They hold 80 percent of the shares and the remaining 20 percent belongs to the Egyptian government.

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