Noble Energy Inc. says the first phase of the Leviathan natural gas project offshore Israel, with first gas targeted end of 2019 can go on. Noble Energy, the operator of the Leviathan Field, also confirmed the field contains 22 trillion ft3 of gross recoverable natural gas resources.
Noble Energy Chairman, President and CEO, David L. Stover was quoted to have said: “Leviathan marks our third major natural gas development offshore Israel. Bringing Leviathan online will expand Israel’s supply of natural gas, further support the State’s commitment to convert coal-fired power generation facilities to cleaner burning gas, and provide affordable energy resources to Israeli citizens and neighbouring countries in the undersupplied region. Leviathan will provide a second source of natural gas for Israel through a separate tie-in location in northern Israel. Noble Energy’s financial strength and capability, proven technical expertise, and phased Leviathan project development approach position us to commence first gas on schedule and within budget.”
Adding that “Sanction and development of Leviathan build on recent portfolio milestones and reinforce our focus on high-margin growth. Leviathan will generate robust project economics, have strong investment efficiency, and provide long-term cash flows. With 40 trillion ft3 gross recoverable resources discovered by Noble Energy in the region, we can continue to grow our Eastern Mediterranean business for decades. This includes material additional development beyond phase one at Leviathan.”
Energy Window International also gathered that Leviathan’s initial development would include four subsea wells, each capable of flowing more than 300 million ft3/d of natural gas. Initial Leviathan proved reserve bookings associated with this investment are 3.3 trillion ft3 net (9.4 trillion ft3 gross) and are expected to be recorded in 2017. This translates into approximately 550 million bbls of oil equivalent net, representing an increase of over 35% to total company reserves.
Report says production will be gathered at the field and delivered yhrough two 73-mile flowlines to a fixed platform, with full processing capabilities, located approximately 6 miles offshore. The Leviathan platform will have an initial deck weight of 22 000 t. Processed gas will connect to the Israel Natural Gas Lines Ltd. onshore transportation grid in the northern part of the country and to regional markets via onshore export pipelines. The approved development plan allows for significant future cost-effective expansion from its initial 1.2 billion ft3/d capacity to 2.1 billion ft3/d.
The Company also estimates gross capital for phase one of Leviathan development will be US$3.75 billion (US$1.5 billion net to Noble Energy), which includes approximately US$100 million spent in 2016 and approximately US$200 million pre-investment for future platform expansion. The company can fund phase one of Leviathan through Tamar operating cash flows as well as Eastern Mediterranean portfolio proceeds. Regional portfolio proceeds received to-date total approximately US$575 million, net. The company is also securing access to a financing facility for additional funding flexibility.
The Company is currently finalizing major project contracts, anticipating drilling one to two Leviathan development wells in 2017 with its partners. Completion activity for all four producer wells, including two previously drilled, is anticipated in 2018. The Company expects to complete project installation and initiate commissioning in the fourth quarter of 2019, with delivery of first gas targeted for the end of 2019.
Noble Energy operates Leviathan with a 39.66% working interest. Other interest owners are Delek Drilling with 22.67%, Avner Oil Exploration with 22.67%, and Ratio Oil Exploration (1992) Limited Partnership with the remaining 15%.
