Oil and Gas

Leviathan signs $1.2 bln natgas deal with Palestinian power company

JERUSALEM, Jan 5 (Reuters) - The partners in Israel’s Leviathan natural gas field said on Sunday they signed a 20-year deal to sell $1.2 billion worth of gas to the Palestine Power Generation Company (PPGC).

It was the first agreement for the Leviathan prospect.

In all, the Leviathan group will sell up to 4.75 billion cubic meters (bcm) of natural gas once Leviathan starts production in 2016 or 2017, said the Delek Group, a key partner in the site.

Leviathan has estimated reserves of 537 bcm and is the largest offshore gas discovery of the past decade.

Texas-based Noble Energy owns 39.66 percent of Leviathan. Delek Drilling and Avner Oil Exploration - units of conglomerate Delek Group - hold 22.67 percent each and Ratio Oil Exploration owns 15 percent.

PPGC aims to build a $300 million power plant in Jenin in the Palestinian-controlled West Bank to be operated by the gas from Leviathan.

“Economic cooperation such as the agreement signed today will lead to prosperity and growth and will contribute to the fostering of mutual respect and trust between Israelis and Palestinians and lay the foundations for peace,” said Yitzhak Tshuva, controlling shareholder of the Delek Group.

Lawson Freeman, vice president of Noble’s Eastern Mediterranean operations, said the group hopes to soon sign more agreements from Leviathan for both the Israeli market and for export. “We continue to work toward developing the Leviathan field as soon as possible,” he said in a statement.