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Noble Agrees to Export Israel's Leviathan Gas for Egyptian LNG

Noble Energy Inc. announced Monday that it had reached a nonbinding agreement to supply natural gas from Israel's Leviathan field, located offshore in the eastern Mediterranean, to liquefaction facilities in Egypt owned by BG International Ltd.

Houston-based Noble, which operates Leviathan and holds a 39.66% working interest (WI) in the field, said it had executed a nonbinding letter of intent (LOI) between the other partners in the field -- Delek Drilling (22.67% WI), Avner Oil Exploration (22.67% WI) and Ratio Oil Exploration 1992 LP (15% WI) -- to supply a gross sales quantity of up to 3.75 Tcf to BG (about 700 Mcf/d) over a 15-year period.

According to Noble, the gas would be delivered to BG through a floating production, storage and offloading vessel deployed at Leviathan. A subsea pipeline is proposed to connect the vessel to liquefied natural gas (LNG) facilities in Egypt.

"The LOI for the export of natural gas from Leviathan is a very positive development for the project and continues to evidence the strong demand for our discovered resources," said Keith Elliott, Noble's senior vice president for the eastern Mediterranean. "Phase 1 of the Leviathan project is designed to provide significant quantities of natural gas to Israel and regional markets. This transaction, in combination with regional cooperation, will also provide access for eastern Mediterranean gas into global markets.

"Negotiations with other potential customers for Leviathan natural gas are progressing, and I anticipate additional agreements to be executed this year in support of the development of the first phase of Leviathan."

The Leviathan field has an estimated 19 Tcf of discovered natural gas resources. Noble unveiled its Leviathan discovery during the second half of 2010 (see Daily GPINov. 16, 2011). In the U.S., Noble is active in the Denver-Julesburg (DJ) Basin, the Marcellus Shale and the deepwater Gulf of Mexico.

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