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Leviathan FLNG only 'an option' for Noble

US independent and partners still assessing options for developing giant gas field off Israel

Senior executives at US operator Noble Energy have said there is no guarantee a floating liquefied natural gas vessel will be deployed on the 22 trillion cubic foot Leviathan field off Israel.

Delek Drilling, the biggest stakeholder in the deep-water asset, last week revealed Golar LNG and Exmar are involved in a design contest covering an FLNG vessel able to produce between 2.5 million and 5 million tonnes per annum of LNG.

Golar has been asked to assess the compatibility with Leviathan of a generic front-end engineering and design study it previously carried out on an FLNG vessel, while Exmar will carry out a fresh FEED study on an FLNG facility.

Noble chief executive Dave Stover told analysts on the company’s second quarter conference call: “We’re far from doing it at this point. The reason we’re looking at it is for... the second or third phase of Leviathan. It just creates more optionality for us.

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“But we would only do it as a low-cost option... to broaden our marketing reach."

He added that this would need to compete with other elements in the plan, including additional pipeline exports to Israel and other countries in the Levant region.

Keith Elliott, the head of Noble’s East Mediterranean business, added: “In terms of timing, (it’s) early days. We’re into FEED now (and) it’s a second-phase project that’s a few years down the road.”

Noble was assessing FLNG solutions for Leviathan as early as 2013 and got as far as requesting bids from three South Korean yards for FEED work on a newbuild 3.3 million tpa vessel.

However, that initial plan was scotched - partly because Woodside Energy’s plan to take a major stake in Leviathan fell through but also due to uncertainties over what was then a nascent technology.

Elliot said the partners decided to revisit FLNG because Golar and Exmar have such vessels operating in Cameroon and Argentina respectively.

“I think the thing that’s different now is we see the ability to connect with a proven vendor who’s got systems up and running in other parts of the world,” he said.

“They’ve come (forward) with an idea of taking processed gas stream off Leviathan,” Elliot added, stressing that it appears to be “a very cost-competitive solution — at least in the initial look at it”.

If Leviathan’s partners do proceed with an FLNG solution, a contract will be awarded to either Golar or Exmar for the long-term charter of a vessel as well as its construction, financing, operation and maintenance.

Phase one of Leviathan is due on stream by the end of this year as a four-well, 120-kilometre subsea tie-back to a platform on the continental shelf with gas piped to markets in Israel and elsewhere.

Stover said the $3.75 billion project is almost 90% complete, with the platform jacket, pipelines and subsea manifold installed in the first quarter, the umbilicals installed in the second quarter and the onshore-offshore pipeline connections complete.

Noble forecasts gas production of about 800 million cubic feet per day in 2020, increasing to close to 1 billion cubic feet per day by the end of that year.

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