Israel's sizable Leviathan gas reservoir will likely begin flowing by the beginning of 2018, the basin's stakeholders announced on Wednesday night.Delek Drilling, a member of the Leviathan partnership, made the announcement in the company's third quarter financial report for 2014. The 621-billion cubic meter reservoir, located about 130 km. west of Haifa, will eventually be used for both domestic and export purposes.In addition to Delek Drilling – which owns 22.67 percent of the basin – another Delek Group subsidiary, Avner Oil Exploration, also holds 22.67% of the reservoir, while Houston-based Noble Energy owns 39.66% and Ratio Oil Exploration has a 15% stake.The partners plan to develop Leviathan in two phases, with the first supply gas to the domestic market and the region, through the establishment of an FPSO. During the first stage, production capacity will be about 18 b.cu.m. per year. Unlike the first phase, the second phase will mainly involve the export of gas, Delek Drilling reported. The project partners said are continuing to examine a range of possibilities for this stage, including the option of constructing a floating liquefied natural gas (FLNG) production facility. According to preliminary assessments, the cost of the first phase of development alone is expected to be between $6 billion - $7b., the report said.When the first phase of development is approved, the 2014-2015 budget will constitute approximately 20-30% of the total estimated budget, with the years 2016, 2017 and 2018 account for 30-40%, 30-40% and 5-10% respectively. In addition to providing details about Leviathan's future development, the Delek Drilling report also offered some further information regarding the neighboring Tamar reservoir – and a potential deal to supply gas from the basin to a liquefaction facility in Egypt. Israel’s 282 b.cu.m. Tamar gas reservoir, about 80 km. west of Haifa, began flowing to Israel’s domestic market in March 2013. Noble Energy holds 36 percent of this basin, while the Delek Group’s Delek Drilling and Avner Oil Exploration each own 15.625%, Isramco controls 28.75% and Dor Gas has 4%.Among several regional letters of intent and deals discussed for both the Tamar and Leviathan reservoirs was a letter of intent signed between the Tamar partners and Spanish firm Union Fenosa Gas, in May. The relevant negotiations, which industry sources said was progressing as of early November, would involve a 15-year contract for the transfer of up to 71 b.cu.m. of gas to the company's liquefaction facility in Egypt.In Wednesday night's Delek Drilling report, the partners indicated that assuming a binding agreement is reached, they would need to supply about 4.5 b.cu.m annually for that 15-year period. In order to do so, the partners would need to expand their processing system capacity up to 20.4 b.cu.m. annually, with the domestic supply capacity at 16 b.cu.m. In order to expand the production capacity, the partners said they are planning the construction of up to three additional production wells, and an additional supply pipe from Tamar reservoir to the Tamar rig, as well as an upgrade of the Tamar and Mari-B platforms. A pipeline from the Tamar platform to the Union Fenosa facilities would also be constructed, with the Tamar partners and the Spanish firm jointly bearing the costs, the report said. Assuming all agreements are signed as planned, gas should start to flow to the Union Fenosa facility by 2017, the report added. Costs associated with the infrastructural expansions would likely amount to $1.5b.-2b., the partners said.