Woodside Petroleum’s partners in the Leviathan gas project in Israel have signed a deal to sell $1.2 billion worth of gas to the Palestine Power Generation Company (PPGC) for 20 years.
The Leviathan group has agreed to sell up to 4.75 billion cubic meters (bcm) of natural gas once production starts in 2016 or 2017, Billionaire Yitzhak Tshuva, who owns a controlling stake in joint venture partner Delek Group, says.
US group Noble Energy owns almost 40 per cent of Leviathan, Delek Drilling and Avner Oil Exploration each hold more than 22 per cent and Ratio Oil Exploration owns 15 per cent.
However, Woodside is yet to commit more than $1 billion to the Leviathan joint venture project.
The company recently halved its full year 2013 spending forecasts to $US1.1 billion ($A1.21 billion) from the previous guidance of $US2.3 billion ($A2.53 billion) due to the deferral of expected expenditure on Leviathan which has estimated reserves of 537 bcm.
Woodside chief executive Peter Coleman recently said his company had some certainty around gas export volumes for Leviathan, but uncertainty remained about tax imposts.
He added that the value of the investment needed to be compelling for Woodside to commit to the project.
Woodside is waiting for the outcome of a review into Israeli tax law relating to LNG and pipeline exports which is due to be released in early February.
