Chevron Corp. and its local partners have received consent from the Energy and Infrastructures Ministry for a new development plan to grow the production and export capacity of the Leviathan gas and condensate field offshore Israel.
The revised plan for the expansion project, called Phase 1B, would grow Leviathan’s production capacity to around 23 billion cubic meters (812.24 billion cubic feet) a year. Leviathan, discovered 2010 off the coast of Haifa city, went onstream December 2019 under Phase 1A, which has a capacity of about 12 Bcm per annum.
The consortium plans to implement the updated Phase 1B plan in either one go or two stages. Stage I would increase the production capacity to approximately 21 Bcm a year. Stage II would add about 2 Bcm.
The Leviathan consortium plans to make a FID (final investment decision) on stage I in the fourth quarter, majority stakeholder NewMed Energy LP said in a regulatory filing last week announcing the government’s approval of the new Phase 1B plan.
The approval by Israel’s petroleum commissioner “was granted in consideration of several technical conditions, implementation of which will be carried out in coordination with the professional team at the Natural Resources Administration at the Ministry of Energy and under its guidance”, NewMed said.
“In his approval, the commissioner stated that in order to increase the pace of production above 2,100 MMscfd, upon performance of stage two of Phase 1B, it will be necessary to submit – and obtain the commissioner’s approval of – supporting documents according to the instructions of the professional team at the Natural Resources Administration at the Ministry of Energy, which shall constitute an update to the Updated Development Plan.
“The commissioner further noted in his approval that the position of the Ministry of Energy as of the present time is that the quantity of natural gas that is recoverable from the reservoir (i.e., the gas quantity produced from the date of commencement of production plus the quantity of recoverable gas remaining in the reservoir) is ~19.4 Tcf (~551 Bcm, compared with the Ministry of Energy’s previous estimate of ~17.6 Tcf (~500 Bcm)), and that these data shall continue to be checked by the ministry in the upcoming years.
“The partnership’s [NewMed Energy Limited Partnership] parallel estimate, which is based on a report of Netherland, Sewell & Associates Inc. as of 31 December 2024, totals ~22.3 Tcf (632 Bcm)”.
Stage 1 would drill three production wells, add new subsea systems and expand processing facilities on the existing platform. The total cost is estimated to be $2.4 billion gross. According to a NewMed regulatory filing February 23, 2025, so far the partners approved $505 million.
Stage 2 “mainly includes the drilling of additional production wells and related subsea systems, and in this context, insofar as required, the laying of a fourth pipeline between the field and the platform, in a manner that is expected to increase the maximum daily production capacity by another ~2 Bcm per year, i.e. to a total quantity of ~23 Bcm per year”, NewMed Energy said then.
Construction of the third pipeline, under Phase 1A, has been delayed by the conflict that followed Hamas’ assault on Israel October 2023. NewMed announced the suspension of construction October 2024, saying the delay could stretch to six months. The third pipeline had been planned to be completed mid-2025.
Meanwhile the Leviathan consortium is awaiting an export permit for a recently amended agreement for the export of Leviathan gas to Egypt. The agreement with current buyer Blue Ocean Energy is for an increase of 130 Bcm in gas deliveries to the North African country.
The added quantities are expected to generate about $35 billion in revenue, NewMed said earlier this month.
Under the amendment to the export agreement with Blue Ocean, the total volume for Leviathan exports to Egypt will be increased in two increments, first by about 20 Bcm and later by about 110 Bcm.
“The amendment to the export agreement determines a mechanism for the timing of commencement of the supply of the increased daily quantity, which is primarily based on the sellers’ estimate regarding the progress of the projects required for expansion of the daily supply quantity, and chiefly completion of phase one of the expansion project and completion of the project for the construction of the Nitzana pipeline”, NewMed said August 7.
The Nitzana pipeline is part of a project approved by the Israeli government in May 2023 to build a new onshore connection between the Israeli and Egyptian gas transmission systems.
“To the sellers’ assessment, as of the report date, the said projects are expected to be completed in 2029”, NewMed said.
NewMed, owned by Israel’s Delek Group, holds a 45.34 percent stake in Leviathan. Operator Chevron owns 39.66 percent through Chevron Mediterranean Ltd. Ratio Energies LP, also an Israeli company, has 15 percent.
To contact the author, email jov.onsat@rigzone.com
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