Israel’s Paz Oil to Process Leviathan Gas Worth $700m

Israel’s Paz Oil to Process Leviathan Gas Worth $700m

Israel’s Paz Oil announced that the company signed a deal worth up to $700m to buy 3.12bcm of natural gas for its oil refinery from the Leviathan field, reported Reuters.

The deal is for up to 15 years, but may expire before that, if Paz, Israel’s largest distributor of refined oil, consumes the entire volume as agreed in the contract in a shorter period. The company notified, however, that the financial value will effectively derive from a range of factors including the amount of natural gas that it will actually buy, the price of a barrel of Brent crude oil, and electricity production tariffs, according to Globes.

Leviathan, which is expected to start production in 2019 or 2020, was discovered in the eastern Mediterranean in 2010 and is one of the world’s largest offshore gas discoveries of the past decade.

The Leviathan partners are Noble Energy Inc 39.66% Delek Group Ltd. units Avner Oil and Gas LP and Delek Drilling LP with 22.67% each and Ratio Oil Exploration LP 15%.

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