November 22nd, 2016, 1:35pm
Israel's energy minister Yuval Steinitz told a conference in Tel Aviv November 21 that the giant Leviathan and two other smaller gas fields offshore Israel, Karish and Tanin, will be developed come what may, and gas would then flow to Turkey.
He told the 2016 Israel Energy and Business Convention in Tel Aviv that there was no question about it. "I know it is sometimes neither simple nor easy. We have done what we had to do, the best I could, and now there is not a situation that timetables would be delayed. It will not happen. It is unthinkable."
The final investment decision (FID) for Leviathan has yet to be taken by the project's partners. Delek is adamant that the FID will be taken by the end of the year while Noble Energy, a 40% shareholder, and the operator, said it could be early next year. Delek Drilling CEO Yossi Abu said at the conference that the Leviathan partners were close to securing $4bn in finance for the field's development. "The Leviathan financing agreements are in the final stages of negotiations," Abu said at the conference. Last month Ratio, a 15% shareholder in Leviathan, had raised about $200mn in bonds in order to finance its equity investment in the project through a mezzanine debt.
In his 30-minute speech, Steinitz said negotiations with Turkey concerning laying of a 500-km pipeline are ongoing and that it will be ready for operations in three years' time, when Leviathan is expected to start production. "When production in Leviathan is started in the three years' time, export to Turkey will start as well," Steinitz said.
Referring to the licensing round the energy ministry launched last week, Steinitz said that "there are probably huge deposits waiting to break out and we have to do it." He said that in 2018 a new assessment will be made concerning gas export quota and promised that most of the gas will be for export.
Gina Cohen, an independent energy consultant, was not convinced by Steinitz's declarations. "I think he talks too much. Even I who spend 12 hours a day dealing on gas, when I hear him I find it very hard to distinguish between what is possible and what is not possible. And that is why I think it will be very hard for others to distinguish it. And including himself and including his ministry. And I would like him very much to focus on what is possible and to focus his energy and his ministry's energy on what is possible and what is doable and to help to afford this projects."