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Major Deal Turns Israel Into Jordan’s Leading Gas Supplier

A deal between the operators of the Leviathan oil and gas field off the Israeli coast and Jordan Electric Power Company has just turned Israel into Jordan’s biggest gas supplier. The 15-year, US$10-billion contract was signed with a consortium, which includes local industrial major Delek Group and U.S. Noble Energy. Jordan will receive 45 billion cubic meters of gas under the deal.

Israeli government officials and Delek representatives praised the deal as “historic”, marking an important milestone in the development of the Leviathan field, where full-scale production is scheduled to begin in 2019. The field is estimated to hold some 19 trillion cubic feet of natural gas and 34.1 million barrels of condensate.

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Indeed, the news is of the groundbreaking sort, as the development of Israel’s largest gas field has been delayed for years because of regulatory hurdles brought on by political disputes and legal issues. The chief point of contention politically was the possibility that the Delek-Noble Energy partnership would become a monopoly on the Israeli gas market, which would end in higher gas prices for local consumers. Another obstacle was the lack of a government policy regarding the development of Israel’s gas reserves.

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The operator of the field, Noble Energy with a 40-percent stake, was finally given the green light to start development works this June. Delek holds 45 percent in the field.

The exploitation of Leviathan could turn Israel into a regional energy leader, even though the state has no onshore oil and gas reserves. Some of its offshore reserves have also been disputed by neighbor Lebanon, with which Tel Aviv has no diplomatic relations but has been embroiled in a dispute with regarding the maritime border between the two countries and allegations from Beirut that Israel is siphoning its hydrocarbon riches.

The Leviathan field is, thankfully for Israel, not a subject of territorial disputes. Gas extracted from it could also flow to Turkey, Egypt, and the Palestinian Authority, according to Delek Drilling’ s chief executive Yossi Abu.

By Irina Slav for Oilprice.com

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