Leviathan Gas Field Is Even More Gargantuan Than Previously Believed

The Leviathan field off the coast of Hadera, discovered in June 2010, has 11 % more gas than the partners had estimated.

The Leviathan natural gas field contains 11% more gas than previously thought, the partners that control that offshore reserve announced Wednesday.

Delek Drilling, Avner Oil Exploration, Modiin Energy and Ratio Oil Exploration said that Israel's largest undersea gas reserve to date likely contains an estimated 19 trillion cubic feet of natural gas, and not 17 TCF as previously thought. This translates into another NIS 2 billion of gas, based on the price of previous contracts Leviathan signed.

These figures are just statistical estimates, however. The companies' figures indicate the size of the reserve could range in practice from 15 TCF to as much as 24 TCF.

The updated figures came after the partners analyzed the results of exploratory drilling at Leviathan 4, which was completed two months ago.

The difference between the previous estimate and the current estimate released today – 2 TCF – is equal in size to all the gas in Tethys Sea, the rapidly depleting offshore gas reserve that supplied the nation with gas for a decade.

The Leviathan partners also updated their estimates for condensate, one of the raw materials used to make brent oil – a light crude oil. Leviathan is now thought to contain 34 million barrels of the material, up from the previous estimate of 22 million. Condensate fetches $100 per barrel, meaning the reserve could be worth NIS 3.5 billion more if this new figure proves true.

The Leviathan partners all saw their share prices rise yesterday. Delek Drilling gained 2%, Avner gained 3% and Ratio was up 4.8%, pulling the index of oil and gas shares up by 2.35% for the day.

The Leviathan gas reserve is located under the Mediterranean seabed off the Hadera shore. It is Israel's largest gas reserve, as well as the world's largest natural gas discovery for the past decade. The partners controlling it include the U.S.-based Noble Energy (39.6%), the Delek Group via subsidiaries Delek Drilling (22.7%) and Avner (22.67%), and Ratio (15%).

In a related development, natural gas from the offshore Tamar gas field near Haifa started flowing last Saturday, and is expected to help many Israeli companies boost profits because of the cheaper cost of fuel.

Courtesy Albatross
Moshe Benjamin