Noble Energy, Inc. has announced that it has sanctioned the first phase of the US$3.5 Leviathan natural gas project offshore Israel, with first gas targeted for the end of 2019.
Noble Energy is the operator of the Leviathan Field, which contains 22 trillion cubic feet (Tcf) of gross recoverable natural gas resources.
Leviathan is Noble’s 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 neighboring countries in the undersupplied region,” Noble Energy’s chairman, president and CEO, DavidStover, said.
“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 Tcf 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.”
Leviathan’s initial development will include four subsea wells, each capable of flowing more than 300 million cubic feet per day (MMcf/d) of natural gas. Initial Leviathan proved reserve bookings associated with this investment are 3.3 Tcf net (9.4 Tcf gross) and are expected to be recorded in 2017. This translates into approximately 550 million barrels of oil equivalent net, representing an increase of over 35% to total company reserves.
Production will be gathered at the field and delivered via two 73-mile flowlines to a fixed platform, with full processing capabilities, located approximately six miles offshore. The Leviathan platform will have an initial deck weight of 22,000 tons. 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 cubic feet per day (Bcf/d) capacity to 2.1 Bcf/d.
FEED is complete for the project and Nobile is currently finalising major project contracts, and long lead materials procurement has begun.
Noble Energy and partners anticipate drilling one to two Leviathan development wells in 2017. Completion activity for all four producer wells, including two previously drilled, is anticipated in 2018. The company said it 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.
Marketing progress has resulted in total volumes under firm gas sales agreements to date of up to 525 MMcf/d. Combined gross revenues for these contracts are estimated to be in excess of $15 billion over the life of the agreements. Total quantities of the executed gas sales agreements, together with domestic and regional volumes under negotiation, now exceed one Bcf/d gross.