Leviathan signs $1.3b deal for West Bank


News of the contract comes as Woodside continues to negotiate the purchase of a 30 per cent stake in the Leviathan field. Photo: Michele MossopThe Leviathan gas venture in Israel, which Woodside Petroleum is negotiating to join, has sealed its first gas sales contract, a $$US1.2 billion ($$1.3 billion) deal to sell gas to the Palestine Power Generation Company.

The gas will be used at a power station that the power generation company plans to build near Jenin in the northern West Bank, a Palestinian-controlled region. It represents less than 1 per cent of the total volume of gas thought to be held in the Leviathan field, Israel’s biggest discovery.

News of the contract comes as Woodside continues to negotiate the purchase of a 30 per cent stake in the Leviathan field.

Completion of the transaction was first delayed by uncertainty over Israel’s gas export policy, and then by changing expectations about how the export project would be structured.

The contract with the power generation company involves 4.75 billion cubic metres of gas, to be delivered once the domestic gas project at Leviathan starts production. Deliveries will continue for 20 years or whenever the sales volume has been reached.

Pricing is linked to Brent crude prices and includes a floor price, according to Delek Group, one of the Israeli partners in the Noble Energy-led Leviathan venture.

The Leviathan project has yet to be approved for development, but analysts are expecting supply to the domestic market to start in about 2017, with gas exports to commence later. The field has about 19 trillion cubic feet of gas, or 538 billion cubic metres.

A Woodside spokeswoman said last week that engagement with stakeholders was “ongoing” as the company sought to finalise its entry into the Leviathan venture.

This story Administrator ready to work first appeared on Guiyang Sauna Net.