Leviathan Gas Field Partners Secure Major 20-Year Domestic Supply Deal
In a significant development for Israel’s energy landscape and investors in the Eastern Mediterranean gas sector, NewMed Energy LP and Ratio Energies LP, key local partners in the world-class Leviathan natural gas and condensate field, have formalized a landmark agreement with Dalia Energy Companies Ltd. This long-term contract will funnel vital natural gas resources from the offshore Leviathan project directly to two major power generation facilities slated for construction within Israel.
A Landmark Domestic Supply Agreement
The freshly inked 20-year gas supply contract, which strategically positions NewMed and Ratio at the forefront of Israel’s domestic energy provision, is projected to commence with an annual supply volume of approximately 1.3 billion cubic meters (BCM) or 45.91 billion cubic feet (Bcf). Notably, NewMed Energy will shoulder the majority of this commitment, accounting for a substantial 75.14 percent of the agreed volume. This foundational phase of the agreement will provide crucial gas feedstock for Dalia Energy’s planned 850-megawatt (MW) combined-cycle gas turbine projects, one each to be situated in the strategic locations of Ashdod and Tzafit.
Looking ahead, the terms of the agreement detail a planned escalation in supply. From a buyer-determined start date falling between January 1, 2034, and July 1, 2035, the daily natural gas deliveries will intensify, culminating in an aggregate annual volume of approximately 1.7 BCM. This phased increase underscores the long-term demand growth anticipated within the Israeli power generation sector and the Leviathan consortium’s commitment to meeting the nation’s evolving energy needs through reliable, domestically sourced natural gas.
Robust Financial Projections and Investor Value
For investors monitoring the financial performance of major offshore gas developments, the monetary implications of this new agreement are highly compelling. The sellers anticipate generating approximately $6.7 billion in total revenue over the two-decade lifespan of the contract. Of this substantial sum, NewMed Energy is set to capture the lion’s share, with an expected revenue contribution of around $5 billion. This lucrative, long-term revenue stream provides a strong foundation for financial stability and predictable cash flow for both NewMed and Ratio Energies, enhancing their investment profiles and reinforcing the economic viability of the Leviathan field.
Such a substantial and extended agreement not only bolsters the financial health of the participating companies but also signals confidence in the longevity and deliverability of the Leviathan asset. It highlights the strategic importance of securing long-term buyers for significant gas volumes, translating into consistent returns for shareholders in the volatile energy market.
Leviathan’s Strategic Expansion and Regional Dominance
The Leviathan gas field, first discovered in 2010 off the coast of Haifa, has swiftly ascended to become a cornerstone of Israel’s energy independence and a vital regional energy supplier. Production officially commenced in December 2019 under its initial Phase 1A development. The consortium, led by Chevron as the field operator, has consistently pursued strategic expansion to maximize the field’s potential.
A significant milestone was reached in January when the Chevron-led consortium made a final investment decision (FID) totaling $2.36 billion to proceed with Phase 1B. This critical expansion phase, which received approval from Israel’s Energy and Infrastructures Ministry in August, aims to substantially boost Leviathan’s production capacity. The first stage of the Phase 1B project is targeted to begin operations in the second half of 2029, with an ambitious goal of increasing the field’s total production capacity to approximately 21 BCM per year, a testament to the consortium’s long-term vision for this prolific asset.
Diversified Markets and Operational Excellence
Leviathan’s gas output serves a diversified market, supplying not only the domestic Israeli market but also significant volumes to neighboring Egypt and Jordan. This market diversification strategy mitigates risk and enhances revenue stability for the consortium partners. Recent operational successes underscore the ongoing commitment to efficiency and increased capacity.
In March, the consortium successfully completed the construction of a crucial third pipeline connecting the offshore field to its production platform. This project also encompassed significant platform upgrades, collectively elevating Leviathan’s current gas production capacity to approximately 14 BCM per year. This operational enhancement directly supports the increased demand from new and existing contracts.
Further solidifying its regional influence, an amended agreement with Blue Ocean Energy, initially signed in 2025, has now seen all conditions fulfilled. This revised deal substantially raises gas exports to Egypt by a total volume of 130 BCM, a move also approved by Israel’s Energy and Infrastructures Ministry in December 2025. Last year’s sales figures underscore the field’s impressive output, with 10.8 BCM of gas successfully delivered to its various markets, demonstrating the asset’s consistent operational performance and market penetration.
The Leviathan Consortium: A Powerhouse Partnership
The strategic prowess and financial muscle behind the Leviathan field are underpinned by a robust consortium of experienced energy players. Chevron Mediterranean Ltd. leads as the operator, holding a significant 39.66 percent stake, leveraging its extensive global expertise in offshore development and production. NewMed Energy, owned by Israel’s Delek Group, holds the largest stake at 45.34 percent, reflecting its deep roots and strategic investment in the region’s energy sector. Rounding out the partnership is Ratio Energies, with a 15 percent interest. This collective expertise and financial commitment ensure the long-term success and strategic importance of the Leviathan gas field, making it a compelling investment case for those seeking exposure to critical energy infrastructure and long-term natural gas supply. Investors closely monitor the collaboration and strategic decisions of these partners as they continue to unlock the full potential of this immense energy asset.