Gas production at the Leviathan field offshore Israel is now expected to start in 2020, delayed from the latest estimate of early 2018, energy industry sources said Sunday.

They said the revised timetable will be part of a compromise framework for the gas sector that the Israeli government is due to approve later this month.

Before a regulatory impasse in Israel’s gas sector, the Leviathan consortium — Noble Energy, Delek Drilling, Avner Oil and Gas and Ratio Oil Exploration — had expected to begin production in early 2018.

The companies said in negotiations with the government in recent weeks that they would not be able to make that target, the industry sources said.

The government is expected to approve increased gas exports from the Tamar field, currently the sole source of supply for the domestic market, the same sources said.

In 2013, the Israeli government approved limited exports of gas from the Tamar field but only after the Leviathan field began commercial production.

Under the proposed new framework, the sources said that gas could be exported from Tamar before Leviathan comes online.

Earlier this month, Israeli Prime Minister Benjamin Netanyahu instructed senior government officials to finalize a compromise agreement with gas exploration companies within a month.

The government’s security cabinet is due to discuss a comprise formula by the end of the month.

Netanyahu has argued that approval of the compromise is crucial for Israel’s foreign relations, citing specifically Egypt and Jordan. Companies from both countries have signed letters of intent to buy Leviathan gas.

The proposed compromise deal recommends granting Delek Group more time to sell its stake in the Tamar field and sell off its holdings in the Tanin and Karish licenses. Delek would be left with its Leviathan stake.

The proposal would require Noble Energy to cut its Tamar ownership to 25%, from 36% currently, and sell its entire holdings in the Karish and Tanin licenses.

Source: Platts