Noble Energy Inc. aims to start production from the giant Leviathan natural gas field in the Mediterranean Sea offshore Israel in December, the Houston-based company said Nov. 7.

The field, discovered in 2010, is estimated to hold 22 trillion cubic feet (Tcf) of recoverable natural gas resources.

The project is running ahead of schedule and is $150 million under budget with total cost now at $3.6 billion, Noble said in its third-quarter 2019 earnings presentation. With construction 96% complete and topside production facilities installed, Noble said commissioning is underway.

“It’s extremely exciting and remarkable to be involved with the project that will have such a historic impact to a country and a region,” Noble Energy CEO Dave Stover said on a call Nov. 7. “There is a tremendous amount of effort remaining to bring the project to completion, and we remain highly focused on delivering a successful and safe start-up with Leviathan.”

Once online, Leviathan is expected to infuse fresh cash flow into the financial coffers of Noble Energy, which also discovered the Tamar gas field offshore Israel.

Leviathan volumes are not included in the company’s fourth-quarter guidance of between 364,000 barrels of oil equivalent per day (boe/d) to 376,000 boe/d. Noble also has assets in the Eagle Ford Shale, Denver-Julesburg Basin, Permian Basin and offshore Equatorial Guinea.

“Post Leviathan, Noble is moving from a single asset supplying Israel domestic customers to a multiple asset supplying over 45 gas sales contracts to customers in three countries,” said Brent Smolik, president and COO for Noble Energy.

The field will supply gas to customers in Israel, Jordan and Egypt.

“As demand in the region evolves and our Leviathan production expands, we naturally expect a greater range of sales volumes,” Smolik added.

Noble Energy estimates sales from Tamar and Leviathan together will average between 1.6 billion cubic feet per day (Bcf/d) and 1.8 Bcf/d for 2020.

The update was delivered a day after the company announced the closing of its $185 million Eastern Mediterranean Gas Co. pipeline acquisition, which Stover said “opens a key pathway for natural gas deliveries from Israel to Egypt.”

The 90-km pipeline, which connects the Israeli pipeline network to Egypt’s, will transport gas into Egypt from the Leviathan and Tamar fields as part of an agreement with Dolphinus Holdings Ltd.

“The amended agreements now provide for total combined firm contract quantities of 3 Tcf of natural gas, an increase of 1.85 Tcf from the prior agreements,” the company said.

Meanwhile, crews are pushing toward first production in December at Leviathan, working on the full hookup of the platform and living quarters along with platform commissioning.

Noble Energy sanctioned Leviathan in 2017. The initial development plan includes four subsea wells with production delivered via two 73-mile flowlines to a fixed platform for processing. From there, processed gas moves via pipeline to the onshore transportation grid in Israel and to regional markets.

“We’re at a really important inflection point for Noble Energy and it’s made possible by bringing one the largest project in our history and one of the largest ever infrastructure projects in Israel,” Smolik said.

 

Offshore