Chevron-operated Mediterranean gas field ready to get export boost show on road

After receiving preliminary approval from Israel’s Energy Ministry, partners in a gas field off the coast of Israel are expected to reach a decision on the expansion of the natural gas export capacity from the field, while stepping up domestic supply. The approval is perceived to constitute the basis for launching the next step of the field’s development.

Based on the authorization received from the Energy Ministry’s Petroleum Commissioner, the export volume from the Leviathan gas field – said to be the largest natural gas reservoir in the Mediterranean – can be increased by an additional 118 BCM, or up to 145 BCM if certain conditions are met.

CEO of NewMed Energy, Yossi Abu, noted: “The Leviathan expansion is taking shape. The Leviathan reservoir is an energy hub containing a vast amount of resources, ensuring energy security for Israel, alongside exports to the regional market and, in the foreseeable future, also to the global market.”

Furthermore, the Leviathan partners – NewMed Energy, Chevron, and Ratio Energies –  are working on greenlighting a decision to carry out front-end engineering design (FEED) and preliminary procurement of long lead items related to the expansion of the Leviathan reservoir’s production system. If the go-ahead is given, the estimated contract value will be around $400–500 million.

In addition to the government’s resolutions adopted in this context, the approval forms a basis for the promotion of Phase 1B of the field’s development plan, which aims to increase gas production and supply to 21 BCM per year. This is seen as a long-term solution for the demand for natural gas in the domestic market, which is the sole focus of current development plans.

Moreover, Phase B is expected to include a liquefied natural gas (LNG) component to expand Leviathan’s customer base to Europe and the Far East. To that end, the Leviathan partners are in talks with two existing liquefaction facilities in Egypt, together with exploring options for liquifying natural gas on a floating unit anchored in the Israeli exclusive economic zone (EEZ).

As an increase in gas demand was foreseen at the project onset, the facilities of Leviathan Phase 1A were designed to accommodate future production expansion needs. An example is the Leviathan processing platform’s design that allows output to be increased from 12 to 21 BCM.

In 2023, nearly $100 million was allocated for the expansion of the existing infrastructure and preparation of the future floating LNG terminal with an annual production capacity of approximately 4.6 million tons of LNG, which was to get $51.5 million while the remaining $44.9 million was earmarked for the performance of front-end engineering and design for Phase 1B.

Additionally, the commissioner’s letter states that as of 2044, the export of natural gas from Leviathan is allowed on an interruptible basis, after sufficient supply to the domestic market has been guaranteed. Furthermore, export on a firm basis from that year will only be possible after reassessing the domestic market’s needs.

The partners claim to be in various stages of negotiating contracts to sell natural gas to customers in the domestic market and export, based both on the current production capacity and on the future production capacity. In May, a deal was inked with Israel’s Eshkol Power Energies to supply natural gas for Eshkol power plant.