Leviathan signs $3b. deal to power planned electric plant in Be’er Tuviya

By
May 30, 2016 00:27

In January, private Israeli power giant Edeltech and its Turkish partner Zorlu Enerji signed a $1.3b. contract for Leviathan gas to be used at the eventual Tamar power plant.

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Israel’s natural gas

Israel’s natural gas. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Owners of the Leviathan natural gas reservoir on Sunday signed an 18-year, $3-billion contract to supply a planned IPM power plant in Be’er Tuviya, near Ashdod.

According to a statement from the consortium that is developing the 621-billion cubic meter Leviathan reservoir, the power station in Be’er Tuviya will be able to produce about 430 megawatts of electricity using mainly natural gas power and diesel fuel. It will be built on 6.2 hectares (15 acres) of land.

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The plant will be owned by Israel Power Management 3000 Ltd. and Triple-M Power Stations Ltd.

Houston-based Noble Energy owns 39.66 percent of Leviathan, while Delek Group subsidiaries Delek Drilling and Avner Oil Exploration each hold 22.67% and Ratio Oil Exploration has a 15% share.

The signing comes a little over a week after the government approved a revised natural gas development outline with a new stability clause.

The IPM contract, the second official customer for Leviathan, is significant, according to Niv Sarne, Noble Energy’s manager of business development, because it is the first since the revised stability clause was formulated. The original clause would have frozen gas prices and regulations for 10 years, without input from future governments, but the revised clause allows future governments to have a say in the market, should it become necessary.

“[The contract] reflects Noble Energy’s and the [consortium]’s commitment to develop Leviathan and a local oil and gas industry,” Sarne said.

Following Sunday’s announcement, Yossi Abu, CEO of Delek Drilling LP and of Avner Oil and Gas Exploration LP, reiterated the consortium’s goal to have gas begin flowing to customers by 2019.

In January, private Israeli power giant Edeltech and its Turkish partner Zorlu Enerji signed a $1.3b. contract for Leviathan gas to be used at the eventual Tamar power plant.


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