Tuesday, December 13, 2016

Delek Group, Ratio approve Leviathan investment - NATURAL GAS WORLD

December 13th, 2016 - 8:35am
Ya'acov Zalel

Delek Drilling and Avner, the two Delek Group subsidiaries with a combined 45.3% holding in the Leviathan gas field, said December 12 that their boards have approved the investment in the first phase of the project.

Ratio, the third Israeli partner, with 15%, also approved the development program and the working plan. Now all eyes will turn to Noble Energy, a 39.7% shareholder, and the operator, to approve the project and take final investment decision before sanctioning the project as early as next year.

The total budget for phase 1 is estimated at $3.5-$4bn according to a filing to the Tel-Aviv Stock Exchange (TASE) for a production capacity of 12bn m³/yr.

Last month Delek Group announced a major project financing deal with HSBC and JP Morgan to the tune of $1.7bn. However so far it is not clear which guarantees the banks have received apart from a lien on the group's rights to Leviathan.
According to the filing, Leviathan Partnership secured so far sales of 76bn m³ in long term contract out of 620 bn m³. Secured annual sales in those contracts amount to 4.7bn m³, with 3bn m³ to Jordan's NEPCO). But 1.5 bn m³ depend on building power generation facilities in Israel, which might not be ready when Leviathan is projected to come online in Q4 2019, according to Delek Group.