Funding for a new floating LNG terminal off Israel’s coast has been approved by the partners in the Leviathan gas field, the companies said on Tuesday, according to Reuters.
The expansion of the Leviathan field, which includes a new LNG terminal, will boost Leviathan’s production to allow for increased exports to Europe, which is looking to disentangle itself from the shackles of Russian energy.
The Leviathan field currently produces around 12 bcm per year, which is sold to Israel, Egypt, and Jordan. The partners in the Leviathan field have agreed to sink another $100 million into field developments, including a new floating LNG terminal in a move that the companies say will boost the field’s production to 21 bcm per year.
The partners have dedicated $45 million to expanding production and $51.5 million to preparing the floating LNG terminal, which is expected to have an annual capacity of 6.5 bcm.
Israel and Egypt have already signed an MOU to send Israeli gas through Egyptian LNG plants to the EU. The group has cautioned that it will still take three years from FID before gas starts flowing to Egypt’s LNG facilities, and the floating LNG part will follow that.
The partners in the project - which include NewMed, Chevron, and Ratio Energies - have estimated the recoverable gas in Leviathan at 22.9 TCF, hailing it as the largest natural gas reservoir in the Mediterranean and one of the largest producing assets in the region.
Over the last decade, Israel has become an energy exporter after several sizeable discoveries.
Prior to Russia’s invasion of Ukraine and the resulting sanctions on its energy products, Russia was the largest supplier of natural gas to the European Union, supplying roughly 40% of the EU’s demand in 2021.
By Julianne Geiger for Oilprice.com
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Currently the bulk of Israeli gas is piped to two Egyptian liquefaction plants on the Mediterranean to be converted to LNG and then exported either to the EU or the Asia-Pacific region along with Egyptian LNG.
Now the partners in the Leviathan field have agreed to sink $100 million into field development allocating $45 million to expand production capacity from the current 12 bcm (equivalent to 424 bcf) to 21 bcm (742 bcf) and $51.5 million to building a floating LNG terminal with an annual capacity of 6.5 bcm in three years from now. This could reduce the volumes of Israeli gas piped to Egypt for liquefaction.
The combined LNG that both Egypt and Israel currently export to the EU doesn’t exceed 13 million tons or 6.0% of Russian gas export to the EU in 2021.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert