Leviathan projections raised by 5%

Shalom: ‘I praise the partners for this good news and for this additional discovery in the Leviathan reservoirץ’

Leviathan 521 (photo credit: Albatross)
Leviathan 521
(photo credit: Albatross)
With the question of how much natural gas to export on the horizon, the Leviathan reservoir partners raised figures of the basin’s proven contents on Wednesday – bringing the reservoir from 18 trillion cubic feet (510 billion cubic meters) to 18.9 t.cu.ft (535 b.cu.m.).
This leap represents an 18 percent increase in gas quantities for the reservoir from the original 16 t.cu.ft (453 b.cu.m.) that the partners had announced at the beginning of their exploration of the basin, which is located about 130 kilometers west of Haifa.
The new figures are the results of a seismology report commissioned by one of the Leviathan partners – Ratio Oil Exploration – and conducted by the Texas-based firm Netherland, Sewell & Associates, a firm of independent petroleum engineers, geologists, geophysicists and petrophysicists.
Although the study was ordered by Ratio, the Texas associates stressed in their report that they “do not own an interest in the discovery nor are [they] employed on a contingent basis,” adding that they received no limitations from Ratio.
“I praise the partners for this good news and for this additional discovery in the Leviathan reservoir,” said Energy and Water Minister Silvan Shalom, in response to the announcement.
“The Leviathan reservoir is an important anchor for the Israeli gas economy,” he continued.
“An increased supply of gas in the reservoir will enable on one hand the provision of more gas to the domestic economy and on the other hand allow for export and an increase the revenue to the state – for investments in education, welfare, health, investments in the Negev and the Galilee and other investments that will benefit the citizens of Israel.”
Despite the heightened reserve estimates, it is still up in the air how exactly Israel will be allocating the natural resource. Neighboring 250- b.cu.m. Tamar is being pumped for domestic use only, but the more than double- sized Leviathan is expected to be at least partially dedicated to export.
The Zemach Committee, led by Shaul Zemach, directorgeneral of the Energy and Water Ministry, recommended in the fall that the government allow no more than 500 b.cu.m. of gas for export, maintaining at least a 450 b.cu.m. supply at home.
While the government has yet to approve the recommendations, environmentalists have slammed Zemach for proposing such a high export cap, demanding that much more gas remain at home.
The partners involved with exploring and drilling the field are currently an American and Israeli mix – Houston-based Noble Energy holds 39.66% of the Leviathan field, Israelbased Delek Drilling and Avner Oil Exploration each hold 22.67% and Israel-based Ratio holds 15%. However, the partners have made a condition agreement to sell a 30% share of the field to Australian firm Woodside Petroleum.
The companies have expressed a desire to export as much as the government will permit them, as they can sell the resource at higher prices to importing countries.
Meanwhile, drilling at Leviathan cannot begin until an export policy is in place, as infrastructure will have to be simultaneously prepared for handling both domestic gas influx and export, Noble Energy CEO Charles Davidson explained to journalists at a press conference in mid-April.
It is absolutely critical for the country to deploy an export policy as soon as possible, or the country will risk facing a natural gas deficit in 2016, Davidson said. This situation would be due to the fact that flow-rate determinations for Tamar were made prior to the Egyptian gas supply’s cessation of flow to Israel.
“There is a clock ticking,” Davidson said at the press conference. “The demand for gas in Israel is growing. We’re going to reach a point here in a few years where a lot more gas is needed here domestically, which means we need to develop Leviathan and we’re going to need time to do it.”