The partners in Israel's Leviathan natural gas field have secured $3bn worth of contract to supply gas to a private power plant in central Israel.
Under the contract, Leviathan will supply 13 billion BCM of gas to the privately controlled IPM power station, which is currently being constructed, Reuters reported.
The power plant is located in Be’er Tuvia and it will receive gas from Leviathan gas field for 18 years.
The IPM power station is controlled by Triple M and Israel Power Management 3000. The plant is planned to produce 430MW of electricity using combined cycle power technology, Globes reported.
The deal comes a week after the country’s government gave its nod for a revised natural gas plan, removing a commitment made to abstain from changing rules for the gas industry for next 10 years.
The gas firms said that the approval for the revised plan has allowed them to sign a deal with IPM.
The Leviathan gas field is estimated to have 622 cubic meters of natural gas (BCM) and it is expected to become operational in 2019.
The partners in Leviathan field include Texas-based Noble Energy, Israeli conglomerate Delek Group and Israel’s Ratio Oil Exploration. The development of the field is projected to cost over $5bn.
Noble’s manager of business development Niv Sarne said:"This deal is an important milestone, in that it establishes another domestic contract that, together with additional domestic and export contracts, are essential for the quick development of Leviathan."
The opposition parties and public advocacy groups in Israel opposed the Leviathan project, saying that it would result in Noble and Delek gaining a significant control of natural gas supply in the country.
Delek Drilling CEO Yossi Abu said: "The Leviathan reservoir will complete the natural gas revolution in the local economy, which is switching to the production of cleaner, more efficient, and more environmentally friendly energy for the benefit of all Israelis.
"We are committed and determined to go ahead with the development of the Leviathan reservoir in order to bring natural gas to the Israeli economy in 2019, and are working on additional agreements to sell natural gas to electricity producers, industrial plants, and other customers in the local economy, and also for export to countries in the region."
Delek Group president and CEO Bartfeld said in the quarterly report: "The ratification a few days ago, of the Natural Gas Outline by the Israeli Government, is a significant milestone for moving forward in the development of the Leviathan reservoir and the expansion of the Tamar reservoir, which will be accelerated in the very near future.
"The coming months will be marked by the completion of the development plans of the reservoirs, as well as the acceleration of negotiations with the countries of the region to sign long-term natural gas supply agreements."
Image: Leviathan natural gas field is located in the East Mediterranean sea. Photo courtesy of RmSilva/Wikipedia.