Leviathan partners, BG sign gas supply letter of intent

Noble Energy Inc. reported the signing of a nonbinding letter of intent (LOI) between partners in the Leviathan natural gas field offshore Israel and BG International Ltd. for the supply of gas from Leviathan to BG’s existing LNG facilities in Egypt.

The LOI contemplates a total gross sales quantity of as much as 3.75 tcf of gas over a 15-year period, or the equivalent of 700 MMcfd over the term. Delivery of the gas to BG is expected at the outlet of the Leviathan floating production, storage, and offloading vessel, with planned connection to the LNG facilities by way of subsea pipeline, Noble said.

A final gas purchase and sales agreement is to be negotiated and will be subject to the receipt of regulatory approvals in Israel and Egypt.

Noble operates Leviathan with 39.66% working interest. Other interest owners are Delek Drilling 22.67%, Avner Oil Exploration 22.67%, and Ratio Oil Exploration (1992) LP 15%. Leviathan field has an estimated 19 tcf of discovered gas resources.