Further to the provisions of Section of the Partnerships' Periodic reports as of December 31, 2014, as released on March 18, 2015 (hereinafter: the "Periodic Report") regarding a proposed outline for the development of the Leviathan field (hereinafter: the "Original Development Plan"), further to the immediate report dated December 17, 2015 regarding the Natural Gas Framework (as defined in the said report) (hereinafter: the "Framework" or the "Gas Framework") coming into force, and to the immediate reports dated December 27, 2015 and January 7, 2016, the Partnerships are pleased to announce that as part of the implementation of the Framework, and in order to advance the development of Leviathan field, on February 25, 2016 Noble Energy Mediterranean Ltd., the Partnerships and Ratio Oil Exploration (1992) Limited Partnership (hereinafter collectively: "Leviathan Partners") submitted to the Petroleum Commissioner in the Ministry of National Infrastructures, Energy and Water Resources (hereinafter: the "Commissioner") a revised development plan for the Leviathan field, which includes supply of natural gas and condensate for the domestic market and for export (hereinafter: the "Development Plan" or the "Plan"), which its main principles are as follows:
- Eight production wells (two of which have already been drilled and will be completed for production) will be connected by a subsea pipeline to a fixed platform (hereinafter: the "Platform") to be built offshore in accordance with the provisions of the national outline plan ("TAMA") 37/H, such Platform to include all gas treatment systems. From the Platform the natural gas will be transported to the Israel National Gas Lines Ltd. (hereinafter: "INGL") onshore transportation grid, via the north entrance as defined in the TAMA (the "Connection Point"). The production, treatment and transportation capacity of the wells, the Platform, the connecting pipeline from the field and ancillary facilities (hereinafter collectively: the "Production System") will be designed to accommodate approximately 21 BCM per annum (in comparison to approximately 16 BCM per annum in the Original Development Plan), and the capacity of the pipeline from the Connection Point to the Platform will be designed to accommodate approximately 12 BCM per annum. The natural gas supplied at the Connection Point to INGL will be designated for supply to the local market and to neighboring countries via the INGL grid. In addition, the Platform will include another exit point to be connected to an additional subsea pipeline with a capacity of up to 12 BCM per annum, which will be designated mainly for export to neighboring countries. According to a preliminary estimation, the cost of the whole Development Plan until first flow of gas, as described above, is approximately US$ 5-6 billion (in respect of 100% of the interest in the Leviathan project), in comparison to an estimated cost of approx. US$ 6-7 billion in the Original Development Plan.
- The Development Plan may be implemented in whole or in two stages, respective of the maturity of the relevant markets, as follows: (1) first stage - consists of four development wells (including the completion of two existing wells for production), and the installation of the Platform with treatment facilities with a capacity of up to 12 BCM per annum, which according to a preliminary estimation, its total cost is approx. US$ 3.5-4 billion (in respect of 100% of the interest in the Leviathan project); (2) second stage - consists of four additional wells, and the increase of the treatment capacity of the Platform by an additional approx. 9 BCM per annum.
- It should be noted that in order to enable production in the capacity as may be required from time to time, and to exploit the resources of the Leviathan reservoir during the lifespan of the project, many additional production wells will be required.
- It is the intent of the Leviathan Partners to advance the necessary regulatory approvals and the execution of gas sales agreements to enable a final investment decision (FID) regarding the Development Plan in the fourth quarter of 2016, for the purpose of enabling first gas production from Leviathan project in the fourth quarter of 2019.
- It should be clarified that to the extent that the scope of demand for gas will increase beyond the capacity of the Production System, as defined in the Development Plan, the Leviathan Partners will act to update the Development Plan in such a manner that will allow the incorporation of additional treatment facilities which are currently not included in the Development Plan. For example, the Leviathan Partners intend to advance in the future an additional phase in the Development Plan, in accordance with current and future demands in other target markets, including the Turkish market, as specified in the relevant section of the Periodic Report.
The partners in the Leviathan project and their interests are as follows:
This is a convenience translation of the original HEBREW immediate report issued to the Tel Aviv Stock Exchange by the Company on February 25, 2016.
- Noble Energy Mediterranean Ltd. 39.66%
- Delek Drilling - Limited Partnership 22.67%
- Avner Oil Exploration - Limited Partnership 22.67%
- Ratio Oil Exploration (1992) - Limited Partnership 15%
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