Israel approves extra gas exports, Leviathan field to be expanded

FILE PHOTO: An aerial view taken from a helicopter shows the Leviathan natural gas rig off the coast of the Mediterranean coast, in northern Israel, April 26, 2023. REUTERS/Amir Cohen/File Photo

JERUSALEM (Reuters) -The partners in Israel's Leviathan gas field said on Wednesday they planned to invest up to $500 million to expand its capacity after the government approved the export of more natural gas from its offshore fields to boost the economy.

Energy Minister Eli Cohen said the decision to more than double the amount of gas allowed for exports would strengthen diplomatic ties, improve Israel's energy security and bring an added windfall to the economy.

His ministry gave the green light for the export of an additional 118 billion cubic metres of natural gas from the east Mediterranean reserves, beyond the 105 bcm previously approved. The companies will still need to get specific export licences for the additional quantities.

Israel's NewMed Energy, which owns a 45.3% stake in the Leviathan field, said its partners now intended to invest $400 million to $500 million in front-end engineering design and long lead items for the field's expansion.

It added that additional exports could rise to 145 bcm if certain conditions were fulfilled.

Leviathan, the largest of Israel's three offshore gas fields which primarily exports to Egypt and Jordan, is operated by Chevron and also includes Ratio Energies as a partner.

"Demand for natural gas in Israel and regional markets is rising and as such we are preparing to expand production at the Leviathan project," Ratio chief executive Yigal Landau said.

Chevron said in a statement that it was "pleased to partner with Israel, and we look forward to supporting the country’s strategy to develop its energy resources for the benefit of the country and the region".

Leviathan currently produces 12 bcm a year, and that will gradually rise to about 21 bcm a year, NewMed said. It said the group is continuing to negotiate new deals to sell gas domestically and internationally.

Israel exported 8.6 bcm of gas to Egypt in 2023, which is an increase of 39% over the prior year. It also supplied Jordan with 2.9 bcm in 2023.

(Reporting by Ari Rabinovitch and Ron Bousso; Editing by Jason Neely, Bernadette Baum, Michael Perry and Alison Williams)