Noble Energy, Inc. (NYSE: NBL) today announced the execution of a non-binding Letter of Intent (LOI) to supply natural gas from the Leviathan field, offshore Israel, to the National Electric Power Company Ltd. (NEPCO) of Jordan. Under terms of the LOI, Noble Energy and the Leviathan partners will supply a base gross quantity of 1.6 trillion cubic feet (Tcf) of natural gas from the Leviathan field over a 15-year term. Sales volumes under the agreement are anticipated to begin at a rate of 300 million cubic feet per day.
Delivery of natural gas is expected to occur at a border location between Israel and Jordan, following the completion of related pipeline infrastructure. The price for the natural gas is based primarily on a linkage to Brent oil prices and is dependent on negotiations of a binding agreement. A final gas purchase and sales agreement is expected to be completed in 2014 and will be subject, among other conditions, to the receipt of regulatory approvals in Israel and Jordan. The parties are working in coordination with, and the support of, the United States Department of State.
Keith Elliott, Noble Energy's Senior Vice President, Eastern Mediterranean, commented, "We look forward to working with NEPCO and supporting economic prosperity across the region through development of these world-class energy resources. This LOI and other recent regional export arrangements are advancing the first phase of development at the Leviathan project, which is being designed with capacity for 1.6 billion cubic feet of natural gas per day. As we continue to mature the technical design of the project, we are making good progress on the marketing side. We now have over 60 percent of Leviathan's initial capacity and 80 percent of targeted initial sales volumes secured with LOIs."
Noble Energy operates Leviathan with a 39.66 percent working interest. Other interest owners are Delek Drilling with 22.67 percent, Avner Oil Exploration with 22.67 percent, and Ratio Oil Exploration (1992) Limited Partnership with the remaining 15 percent. The Leviathan field has an estimated 22 Tcf of discovered natural gas resources.