Whilst start-up of Energean’s Karish field is a game-changer in terms of Israel’s oil output, with production set to hit 32,000 b/d by end-2023 (MEES, 20 January), the country’s other two producing gas fields Leviathan and Tamar produce a not-insignificant 4,000 b/d of condensate.
Of this, Leviathan’s 2,600 b/d contribution has to date been supplied to the 197,000 b/d Bazan (ORL) refinery in Haifa for free. But Chevron (39.66%op) and its Israeli Leviathan partners NewMed Energy (45.34%) and Ratio Energies (15%) on 19 January signed an agreement to sell Leviathan condensate to Israel’s second refinery, the 100,000 b/d Paz plant in Ashdod. NewMed and Ratio say the price will be at a variable discount to Brent with expected gross earnings over the four-year contract of “approx. $200-300mn… based on the level of Brent prices on the date hereof”. This equates to $53-79/B presuming volumes remain at 2,600 b/d, though volumes are set for a modest increase in 2025 when Leviathan gas output capacity increases from 1.2bn cfd to 1.4bn cfd (MEES, 9 December 2022). (CONTINUED - 635 WORDS)