Leviathan partners submit updated field production plan

The partners in Israel’s Leviathan gas field this week submitted an updated development plan the offshore asset to the country’s Ministry of Energy and Infrastructure. The update foresees the addition of a further 1bn cubic metres per year of gas in comparison to the previous plan.

According to a press release by the field’s majority shareholder, Israel’s NewMed Energy, the updated field development plan “mainly includes updates in connection with Phase 1B, including in relation to the processing facilities on the platform, the location and timing of well drilling, and the possibility of performance of stage two of Phase 1B.”

NewMed, formerly Delek Drilling, holds a stake of 45.34% and is partnered by operator Chevron Corp. (39.66%) and the local Ratio Oil Corp. (15%).

The Israeli firm said that the updated plan “may” be carried out either in full or in two stages. The first comprises the drilling of three additional production wells, adding related subsea systems and expansion of the processing facilities on the platform. This is expected to take gas production capacity to 21 bcm, at a total cost of around $2.4bn, according to an estimate by Chevron.

According to the previous version of the plan, announced in June last year, the front-end engineering design (FEED) for Phase 1B was expected to cost $400mn-500mn. NewMed noted that of the overall $2.4bn, $505mn has been approved by the partners.

NewMed’s press release said that the second stage is focused on drilling additional production wells and related subsea systems, and if required, laying a fourth pipeline between the field and the platform. This is expected to raise production capacity by another 2 bcm, taking it to 23 bcm per year.

It said: “The partners intend to promote the receipt of the required regulatory approvals and the signing of the agreements for the sale of natural gas to the domestic market and for export, in the context of Phase 1B, in a total volume of over 100 bcm, in accordance with the Commissioner’s letter, with the aim of adopting a final investment decision (FID) for performance of stage one of Phase 1B in the coming months.”

In Q2 last year, the Ministry of Energy gave preliminary approval to increase natural gas exports while also boosting domestic supply. The export volume could be raised by an additional 118 bcm, potentially reaching up to 145 bcm upon meeting certain conditions.

Commenting on the update, NewMed CEO Yossi Abu said: “The Leviathan reservoir is the most stable and strongest energy hub in the Mediterranean. The expanded production capacity will meet growing domestic demand and strengthen Israel’s role as an energy provider, while bolstering regional collaborations.”

Production at Leviathan began in December 2019, with gas going to the domestic Israeli market. The field now supplies gas to Jordan and Egypt as well, and plans are being drawn up to install a floating LNG (FLNG) vessel at the site with a capacity to produce 4.5mn tonnes (6.5 bcm) per year. Initial investment in the FLNG project is estimated to cost $100mn.

In March 2023, a report by Texas-based Netherland Sewell and Associates Inc (NSAI) raised the value of the field to $12.5bn.