ExxonMobil is discussing to create a platform that would enhance the export reach of Israel’s largest natural gas field. The oil major is negotiating with Israel’s Leviathan reservoir to establish a floating LNG vessel.
This project would enable Leviathan to export to countries that cannot be reached with pipelines and avoid building expensive infrastructure to connect to LNG facilities in Egypt, Bloomberg reported. However, it is too early to say that these negotiations will eventually lead to a partnership.
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What is more, in spite of recent significant gas discoveries in the Eastern Mediterranean, viable export routes are hard to find, making energy companies hesitant. In fact, Leviathan partners have signed deals to meet increasing demand in Egypt, Jordan and Israel, but they have not yet found a way to export to Europe or East Asia.
The partners developing Leviathan have marked the next phase of the reservoir’s development for export deals and are analyzing ways to reach markets outside the region. Namely, Delek Drilling LP, the biggest shareholder in the Leviathan field, is searching various options, like buying a stake in one of Egypt’s LNG sites.
These negotiations with Exxon can be an indication that an unofficial energy boycott on Israel, imposed by Arab countries, is decreasing. Until now, energy companies were hesitating to partner with Israel, worrying of risking ties with states that control some of the world’s biggest energy reserves.
However, this situation seems to be changing, as Israel and Persian Gulf states have found common cause against Iran. In addition, covert trade with Arab countries, mainly involving Israel’s technology sector, has also increased.
If Exxon expands in Israel, it would reflect the company’s ambitions in the East Med. in fact, Exxon has set out a foothold in the region in February, as it found an offshore reservoir in Cyprus’s waters.
Furthermore, Exxon has also talked with the Israeli Energy Minister Yuval Steinitz, for taking part in a future tender for new offshore drilling blocs.
