Leviathan gas to supply Israeli market

The partners controlling the Leviathan gas field off the Israeli coast announced they signed a deal for deliveries to a local electricity producer.

Israeli electric company Edeltech Ltd. agreed to take on natural gas from the offshore field from Texas-based Noble Energy, along with Delek Drilling and Avner Oil Exploration.

Delek Drilling CEO Yossi Abu was quoted by Bloomberg News as saying the deal "marks a beginning" for the Leviathan field.

Leviathan is among the largest natural gas fields in production in the world. Israeli Prime Minister Benjamin Netanyahu has said the full development of offshore natural gas reserves would be "for the benefit of the citizens of Israel."

Last year, the Israeli partners expressed interest in coordinating gas deliveries from the Mediterranean basin to Egyptian gas and electric companies. The U.S. State Department facilitated talks in 2014 that led to the signing of regional deals for gas deliveries from Israeli fields.

Gas deliveries from Leviathan to Edeltech total 211 billion cubic feet over the full-term of the deal. Leviathan, along with the nearby Tamar gas field, combine for an estimated 28 trillion cubic feet of natural gas reserves, with Leviathan accounting for more than half of the aggregate.

Gas prices for Edeltech will be tied to the market. Delek said the terms of the deal may amount to approximately $1.3 billion for the Leviathan partners.