Options widen for Woodside's Leviathan partners
Partners in the giant Leviathan export gas project in Israel, which includes Woodside Petroleum, are considering a staged development program, initially piping gas to regional buyers before shipping the gas further afield.
Recent speculation has centred solely on piping gas to regional buyers such as Turkey, with no plans to supply the gas further, which would undercut Woodside's interest in buying into the project.
A year ago, Woodside signed a memorandum of understanding to take a 30 per cent stake in the venture for $US1.5 billion.
Since then, there have been legal challenges coupled with a change in development options, in favour of piping the gas, rather than refrigerating it for export.
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In an analyst briefing on Wednesday, Noble Energy, which holds a 39.66 per cent stake in the project, said the partners were seeking to incorporate ''optionality'' into the project so that some gas would be piped to nearby markets such as Turkey and possibly Egypt, along with smaller prospective markets Cyprus and Jordan.
Noble also told analysts the size of the Leviathan deposit has expanded to an estimated 19 trillion cubic feet of gas, up from 16.7 tcf project earlier.
Progress in developing the field has been delayed for several months pending the resolution of regulatory issues such as the export policy and anti-trust issues.
''All parties are … targeting a structure that allows us to recognise the increased value that we see coming forth from Leviathan,'' Noble vice-president Keith Elliott told analysts.
''We've discovered nearly 40 tcf of gas, and we have roughly 19 tcf of that gas that's available for export to both regional and extra-regional markets. We see exports reaching 2 bcf a day in capacity in the next decade. And we continue to explore.''
The giant Leviathan prospect will be developed ''in multiple phases to service both the domestic and export markets'', analysts were told.
Initially, Leviathan will supply an estimated 800 million feet of gas a day for the Israeli domestic and regional markets. That will be followed by a liquefied natural gas phase. Initial production is expected in the second half of 2017.
The news came as there was renewed speculation that Woodside would not pursue the negotiations to buy into Leviathan, since the original plans to refrigerate the gas for export were pursued when relations between Israel and Turkey were strained. That has changed, more recently, which has opened the door for gas to be piped to Turkey.
Woodside's Leviathan partners push for 'optionality'
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Partners in the giant Leviathan export gas project in Israel, which includes Woodside Petroleum, are considering a phased development, initially piping gas to regional buyers before moving to ship the gas further afield.
Recent speculation has centred on piping gas to regional buyers such as Turkey, which could see Woodside not pursue plans to participate in the venture.
A year ago, Woodside signed a memorandum of understanding to take a 30 per cent stake in the venture for $US1.5 billion ($1.7 billion).
Since then, there have been some legal challenges coupled with a change in development options, in favour of piping the gas, rather than refrigerating it for export, which is the reason why Woodside is keen to buy into the project.
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In an analyst briefing Wednesday, Noble Energy, which holds a 39.66 per cent stake in the project, said the partners are seeking to incorporate ''optionality'' into the development plans, so that some production could be piped to nearby markets, such as to Turkey and possibly Egypt, with smaller prospective markets in both Cyprus and Jordan.
Noble also told analysts the size of the deposit has expanded to an estimated 19 trillion cubic feet up from 16.7 tcf project earlier.
Progress in developing the field has been delayed in recent months pending the resolution of regulatory issues such as export policy and anti-trust issues.
''All parties are actively and sincerely engaged in negotiations and are targeting a structure that allows us to recognize the increased value that we see coming forth from Leviathan,'' Noble vice president Keith Elliott told analysts.
''We've discovered nearly 40 Tcf of gas, and we have roughly 19 Tcf of that gas that's available for export to both regional and extra-regional markets.
''We see exports reaching 2 Bcf a day in capacity in the next decade. And we continue to explore.''
Noble told analysts the giant Leviathan prospect will be developed ''in multiple phases to service both the domestic and export markets''.
''And we're currently working with our regulators and with our sales customers to refine the market demand, to solidify export and domestic sales contracts and then to secure the regulatory approvals necessary,'' Elliott said.
Initially, Leviathan will supply an estimated 800 million feet of gas a day for the Israeli domestic and nearby regional markets, analysts were told.
That will be followed by a liquified natural gas phase.
''Our current view is that of a floating LNG project ... of 1.6 Bcf a day FPSO.''
Initial production is expected in the second half of 2017, analysts were told.
Read more: http://www.smh.com.au/business/mining-and-resources/woodsides-leviathan-partners-push-for-optionality-20131219-2zmt5.html#ixzz2nzeLJRDR | Read more: http://www.smh.com.au/business/options-widen-for-woodsides-leviathan-partners-20131219-2znu6.html#ixzz2nzcMgRj2
Link to source: http://www.smh.com.au/business/options-widen-for-woodsides-leviathan-partners-20131219-2znu6.html & http://www.smh.com.au/business/mining-and-resources/woodsides-leviathan-partners-push-for-optionality-20131219-2zmt5.html
