Leviathan gas field operator Noble Energy and its Israeli partners Delek Group and Ratio Oil, have agreed a deal to supply as much as $3billion of natural gas to a new power plant in central Israel.
Under the deal, Leviathan will provide up to 13 billion BCM for 18 years to the IPM plant in Be’er Tuvia once gas starts flowing from Leviathan.
The IPM power station will produce 430 megawatts of electricity using combined cycle power technology (natural gas as the main fuel and diesel oil as a backup).
The move represents significant progress for the operators of the Leviathan field, one of the largest offshore discoveries in recent years. It comes a week after the Israeli government approved a revised deal that fast-tracks development of the field, which is located off the Mediterranean coast. It is estimated the field will cost more than $5 billion to develop.
In March, Israel’s supreme court blocked a deal between the partners and the government after opposition groups argued that Texas-based Noble and Delek, which also own the neigbouring Tama field – would control too much of the country’s natural gas supply.
Leviathan has an estimated 622BCM of natural gas reserves and is expected to become operational in 2019.
In January, Leviathan signed a $1.3 billion gas supply contract with Edeltech, Israel’s largest private power producer.
Noble said the deal was significant because it establishes another domestic contract that is essential for the quick development of Leviathan.
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