Australia's Woodside Petroleum is remaining tight-lipped on the impact of the Israeli cabinet's decision to allocate up to 50% of any gas field's reserves to the domestic market.
"We look forward to considering the detail of the gas export policy," a spokeswoman for Woodside said Tuesday.
Israel's cabinet approved by an 18-3 vote on Sunday a proposal to allocate 60% of the country's offshore gas reserves for the domestic market and 40% for export.
A last-minute change determined that the amount to be set aside for the domestic market to 2040 would be 540 billion cubic meters and that any exports to neighboring countries including Jordan and the Palestinians would come out of the export quota and not from the domestic allocation. The three ministers voting against the proposal demanded that the amount to be set aside be increased to 600 Bcm.
The 40% allocation for export was reduced from 53% recommended by a government-appointed committee.
But there are some variations to the export limits, depending on the size of the field. Gas fields with reserves of 200 Bcm or more will be required to set aside at least 50% of output for the domestic market. The amount for fields of at least 100 Bcm and less than 200 Bcm will be 40%, and for fields with reserves of 25 Bcm to 100 Bcm it will be 25%.
Woodside is waiting on the Israeli government's go-ahead for LNG exports from the massive Leviathan gas field. The government's decision is a key trigger to enable Woodside to complete its planned purchase of a 30% interest in the field, which is estimated to hold 19 Tcf of gas.
Under the terms of a $1.25 billion deal announced last December, Woodside agreed to pay $696 million up front for the stake, with another $200 million payable once laws permitting LNG export from Israel are in force, and another $350 million should there be a final investment decision on an LNG project at Leviathan.
The deal was initially expected to be completed in late February, but the sign-off has been delayed pending approval of Israel's gas export policy.
Woodside CEO Peter Coleman last month told Platts in an interview that pipeline export options from Leviathan were under discussion. He added that work toward finalizing the Australian company's buy-in to the field were going well.
"The debate in Israel at the moment is really around export and there's a condition in the offer that we made that is linked to export, so both parties are really looking for certainty," Coleman said. "The Leviathan joint venture [partners] are just waiting for some clarity from government around what export will look like to ensure that they've got confidence that the trigger that we've put in for the payment actually will get triggered."
Leviathan is currently held by Noble Energy (39.66%), Delek Drilling (22.67%), Avner Oil and Gas (22.67%) and Ratio Oil Exploration (15%). Operator Noble is planning to start commercial production of Leviathan gas for the domestic market in 2016.
