Gas expansion on Chevron’s Mediterranean agenda with subsea pipeline works due by year-end

After hitting the brakes on the planned activities at a giant natural gas field expansion project off the coast of Israel because of the Israel-Gaza war in the Middle East, Chevron Mediterranean, a subsidiary of the U.S.-headquartered Chevron, has penciled in the end of the works on a third subsea transmission pipeline for 2025.

The postponement came two months after the U.S. oil major and its Leviathan partners, NewMed Energy and Ratio Energies, green-lighted a $429 million investment to begin the front-end engineering design (FEED) phase for the proposed gas export capacity increase from the Leviathan field in the Mediterranean up to 21 billion cubic meters of gas (bcm) per year.

The daily gas production capacity from the Leviathan reservoir is approximately 1.2 bcf, or around 12 bcm annually. The final investment decision (FID) for Phase 1A, entailing the laying of a third subsea pipeline from the field to the platform, was envisioned to enable the rise in the daily gas production capacity to about 1.4 bcf, or 14 bcm a year, with a budget of approximately $568 million.

Chevron has informed its Leviathan partners of its expectation to complete the third pipeline project by the end of 2025 to allow for a boost in the daily production capacity to around 1.4 bcf starting from the beginning of 2026. A further increase in production is also anticipated to come with Phase 1B of the Leviathan project development plan, for which a FID may be adopted in the coming months.

“The partners in the Leviathan project are promoting negotiations at various stages with potential customers, both in the domestic market and for export, for the signing of agreements for the sale of natural gas under Phase 1B, with a total volume of more than an additional 100 bcm, according to the letter from the Petroleum Commissioner at the Ministry of Energy and Infrastructure,” highlighted NewMed.

Moreover, Phase B is designed to include a liquefied natural gas (LNG) component to widen Leviathan’s customer base to Europe and the Far East after the Leviathan partners approved the budget for expanding the existing infrastructure to include a floating LNG (FLNG) facility, expected to produce 4.6 million tons of LNG per year. 

The expansion and the future FLNG facility are needed for the potential LNG deliveries from the Leviathan reservoir to Germany under the memorandum of understanding (MoU), which was signed by NewMed and Uniper.

Leviathan, which is located around 130 kilometers off the shores of Haifa, is said to be the largest natural gas reservoir in the Mediterranean and the biggest energy project in Israel’s history, with 22.9 trillion cubic feet (tcf) of recoverable gas believed to be at its disposal.

This deep-sea field, consisting of four subsea wells producing via a subsea manifold and two 120-kilometer-long pipelines leading to an offshore platform for gas processing, came online in December 2019.

The gas gets piped from the platform to shore into the Israeli national grid and distributed to Israel, Egypt, and Jordan. The start-up of natural gas production from the next stage of the Leviathan project was anticipated to be between mid-2028 and mid-2029.