Chevron-operated Mediterranean gas field poised to boost exports

After receiving preliminary approval from the Israeli Energy Ministry, partners in a gas field off Israel’s coast are expected to make a decision on expanding the field’s natural gas export capacity, while ramping up national supply. This approval is considered the basis for launching the next stage of the field’s development.

Based on the authorization received from the Oil Commissioner of the Ministry of Energy, the export volume of the Leviathan gas field – considered the largest natural gas reservoir in the Mediterranean – can be increased by 118 billion meters additional cubic meters, or up to 145 billion cubic meters if certain conditions are met. are met.

CEO of NewMed Energy, Yossi Abounote: “The Leviathan expansion is taking shape. The Leviathan Reservoir is an energy hub containing a large amount of resources, ensuring Israel’s energy security, as well as exports to the regional market and, in the foreseeable future, also to the global market.

Additionally, Leviathan’s partners – NewMed Energy, ChevronAnd Energy Report – are working towards approval of a decision to carry out the front-end engineering design (FEED) and preliminary procurement of long-term elements related to the expansion of the Leviathan tank production system. If approved, the estimated value of the contract will be approximately $400-500 million.

In addition to the government resolutions adopted in this context, the approval constitutes a basis for promoting Phase 1B of the field development plan, which aims to increase gas production and supply to 21 BCM per year. This is considered a long-term solution to meet the demand for natural gas in the domestic market, which is the sole objective of the current development plans.

Additionally, Phase B is expected to include a liquefied natural gas (LNG) component to expand Leviathan’s customer base in Europe and the Far East. To this end, Leviathan’s partners are in discussions with two existing liquefaction facilities in Egypt, as well as exploring options for liquefying natural gas on a floating unit anchored in Israel’s Exclusive Economic Zone (EEZ).

As an increase in gas demand was anticipated from the start of the project, the Leviathan Phase 1A facilities were designed to meet future production expansion needs. An example is the design of the Leviathan processing platform which allows production to be increased from 12 to 21 BCM.

In 2023, nearly $100 million was allocated to the expansion of existing infrastructure and the preparation of the future floating LNG terminal with an annual production capacity of around 4.6 million tonnes of LNG, which was to benefit of $51.5 million while the remaining $44.9 million was intended to carry out the initial engineering and design of Phase 1B.

Furthermore, the commissioner’s letter states that from 2044, the export of natural gas from Leviathan will be permitted on a discontinued basis, once sufficient supply to the domestic market has been ensured. Furthermore, exports on a firm basis from this year will only be possible after a reassessment of the needs of the domestic market.

The partners say they are in various stages of negotiating contracts to sell natural gas to domestic and export customers, based on both current production capacity and future production capacity. In May, an agreement was signed with Israeli company Eshkol Power Energies to supply natural gas to the Eshkol power plant.