LNG

NewMed Energy, the Israeli company with stakes in the East Mediterranean gas fields like Leviathan offshore Israel and the Aphrodite field offshore Cyprus and with LNG export ambitions, reported solid earnings and steady exports to regional markets amid advances in several projects.

UK major BP and Abu Dhabi National Oil Company have decided not to proceed with a joint offer to take control of NewMed Energy, the Israeli natural gas company with LNG export plans and a supplier of pipeline gas to Israel, Egypt and Jordan.

A statement from NewMed said that the merger process was suspended because of the conflict in Gaza between Israeli military forces and the Hamas terrorist group and would not be proceeding in the near future.

The suspension would remain in force until discussions on an actual transaction resumed or were totally terminated.

“There can be no certainty that discussions will resume or that an agreement will be reached in the future, nor as to the terms of an agreement should one be reached,” explained NewMed.

“The NewMed Partnership will update unitholders of further developments as appropriate,” it added.

Suspension details

NewMed stated that the joint committee looking into the BP-ADNOC deal has agreed “due to the uncertainty created by the external environment” to suspend discussions in relation to the proposed transaction.

BP and ADNOC had previously made a non-binding offer in March 2023 to take NewMed Energy private and out of the Tel Aviv Stock Exchange through an acquisition of the free float listed shares and a partial acquisition of a stake still held by Israel's Delek Group.

The transaction would have resulted in BP and ADNOC holding 50 percent of NewMed Energy.

NewMed, a stakeholder with US major Chevron Corp. in the large Leviathan natural gas field offshore Israel, had previously approved budgets for 2023 including gas field development to provide feed gas for a floating LNG export project.

BP and ADNOC had intended to form a new joint venture that would have focused on “gas development in international areas of mutual interest including the East Mediterranean” region.

The proposed BP-ADNOC transaction followed a move by NewMed Energy itself to merge with Capricorn Energy of the UK but the Israelis later withdrew in February 2023 from that bid.

Main assets

The main NewMed asset, the Leviathan gas field, supplies the Israeli domestic market as well as exporting gas by pipelines to Egypt and Jordan.

The Leviathan project shareholders are the NewMed Partnership with 45.34 percent, Chevron subsidiary, Chevron Mediterranean Ltd with 39.66 percent, and Ratio Energies with 15 percent.

NewMed, which announced its name change from Delek Drilling to NewMed Energy in February 2022, also has a stake in the Aphrodite gas field in the offshore economic zone of Cyprus, making it one of the biggest players in the East Med.

Four months after the start of the Gaza conflict BP and ADNOC said in February 2024 that they had formed a joint venture in Egypt that would initially focus on natural gas and would incorporate Egyptian concession stakes held by BP.

That joint venture is expected to be formed in the second half of 2024 and will be 51 percent owned by BP and 49 percent by ADNOC.

The BP-ADNOC Egyptian joint venture was originally planned to be the second phase of cooperation between the two companies in the East Med gas and LNG province after the planned acquisition of the 50 percent stake in Israel’s NewMed.