Israel’s power major Edeltech and its Turkish partner Zorlu Enerji have signed a $3 billion contract to supply natural gas from the Leviathan field over 18 years to a proposed power plant in Be’er Tuviya.
Israel Power Management (IPM) and Triple-M Power Stations will own and operate the 430 MW gas power plant, which will be built on a 6.2 hectares site near the city of Ashdod. Fuel for the plant will be sourced from the 621 bcm Leviathan field – Israel’s biggest offshore find.
Niv Sarne, Noble Energy’s manager of business development, commented the contract would reflect the consortium’s “commitment to develop Leviathan and a local oil and gas industry.” Houston-based Noble Energy owns 39.66% of Leviathan, while Delek Group subsidiaries Delek Drilling and Avner Oil Exploration each hold 22.67% and Ratio Oil Exploration has a 15% share.
Revised gas development law
Signing of the contract come just a week after the government approved a revised natural gas development outline with an amended stability clause. The original legal clause would have frozen gas prices and taxation for 10 years, but the revised clause allows future governments to propose changes, if necessary.
The new deal establishes two test points for investments to be made in Leviathan; with the first being the need by the partnership to invest $1billion dollars by the end of 2017 and the second is that they invest $4 billion by 2019.
Commenting on the revised natural gas development outline, Yossi Abu, CEO of Delek Drilling and Avner reiterated the consortium’s aim to have first Leviathan gas start flowing to customers by 2019.