Leviathan partners sign condensate sale deals

Noble Energy-led consortium operating the giant offshore gas field Leviathan in Israel has signed agreements with Oil Refineries Ltd and another buyer for the transport of condensate to be produced from the field. The Leviathan is expected to be brought online this month.

In an announcement on Sunday, Delek Drilling, a partner in the project said that under the agreement signed with Oil Refineries Ltd, condensate that is produced from the Leviathan reservoir will be transported to the existing fuel pipeline of Europe Asia Pipeline Co. Ltd. (EAPC) which leads to a tank farm of Petroleum & Energy Infrastructures Ltd. (PEI) in Kiryat Haim, and from there will be transported to Oil Refineries Ltd’s facilities.

Apart from the deal with ORL, Delek said an agreement was signed with an international trade company in the fuel industry to transport Leviathan condensate via road tankers and deliver it to the buyer at PEI’s tank farm (the “Supply Agreement”). The Supply Agreement will be in effect from the start of the transport of natural gas from the Leviathan reservoir until December 31, 2020. The agreement will be renewed each year for a period of one additional year unless one of the parties chooses not to renew.

As part of the second agreement, the price of the condensate will be linked to the Brent barrel price, and the buyer will be entitled to a discount if the condensate deviates from the specification outlined in the Supply Agreement,

Delek said that concurrently with the transport of the condensate according to the agreements revealed on Sunday, the Leviathan Partners are continuing to explore other alternatives for the transportation and the sale of the Leviathan condensate.

The ~$3.7 billion Leviathan project is the largest energy project in Israel’s history. The project development is in the final stages and is slated to start delivering gas to the Israeli domestic market and regional markets in December 2019.

The project is being developed via an offshore platform from which treated gas and stabilized condensate will flow through a northern entry pipeline connected to the INGL (Israel Natural Gas Lines) national gas transmission system.

According to Noble Energy, the Leviathan gas will make it possible for the Israeli energy sector to be based almost exclusively on electricity generated by natural gas. Also, it will make Israel an energy exporter.

The Leviathan field is estimated to hold 33 Tcf of natural gas resources in place (22 Tcf recoverable). It was discovered in December 2010, 125 kilometers west of Haifa. It will have a total production capacity of 1.2 billion cubic feet of natural gas per day (Bcf/d).

Offshore Energy Today Staff

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