Israel, US sign $10 bn gas deal with Jordan

Israel, US sign $10 bn gas deal with Jordan

Gross revenues from the contract are expected to be around $10 billion.

The Dollar Business Bureau

Leviathan offshore gas field of Israel has inked a landmark agreement to supply natural gas to National Electric Power Co (NEPCO) of Jordan over 15 years, in a pact valued at $10 billion.

“The deal was signed on Monday with Jordan’s NEPCO for supplying 300 million cubic feet daily over a period of 15 years,” US company Noble Energy, the key partner, said in a statement.

The deal includes an option to buy an additional 50 million cubic feet to make an overall of 350 million per day.

“Gross revenues from the contract are expected to be around $10 billion,” it added.

“The supply to NEPCO is likely to start at the same time as the expected 22 trillion cubic foot field becomes online to local clients in 2019. However, it is subject to regulatory nods from Jordan and Israel,” the company said.

After a long political and legal wrangling, the government of Israel only sanctioned the plans of US-led consortium for Leviathan on May 22 this year.

Noble Energy has a partnership with energy companies of Israel - Delek Drilling and Avner Oil Exploration of Delek Group, and Ratio Oil Exploration.

“The signing of the export agreement between the Leviathan project and... NEPCO is a historic one and positions the Leviathan Project in the centre of the regional energy map,” Yossi Abu, CEO, Delek Drilling and Avner said in a statement.

Earlier, the project was blocked by the supreme court of Israel terming it as unconstitutional, with critics saying that it overly favoured the energy firms.

The deal was then reviewed to consider the objections of the court and subsequently the govt of Israel gave its approval.

Leviathan is Israel's largest offshore gas field, having sufficient reserves to make the resource-poor nation into a significant exporter.

The Dollar Business Bureau - Sep 27, 2016 12:00 IST