US supermajor and partners sanction Leviathan production capacity hike
US supermajor Chevron and its partners have taken a final investment decision on a project to expand the gas production capacity of the Leviathan platform offshore Israel.
The $2.36 billion expansion project includes drilling three extra subsea wells, adding additional subsea infrastructure and enhancing the treatment facilities on the Leviathan production platform, located about 10 kilometres offshore.
In order to increase gas flows to Egypt, more investments will be also need to be made in onshore and offshore pipelines and compressor stations, funded by Leviathan’s partners and the Israeli state.
Chevron confirmed the expansion as the company progresses towards increasing total gas delivery to Israel and the region to some 21 billion cubic metres per annum from the Leviathan reservoir. The field currently produces around 12 Bcm per annum of gas.
The Leviathan expansion project is scheduled for completion and commencement of gas production in the second half of 2029.
The operator added the project increases “affordable, reliable gas for Israel, Egypt and Jordan”.
Following FID, the partners released an updated reserves, contingent resources and discounted cashflow report for Leviathan, prepared by Netherland Sewell & Associates (NSAI).
According to NSAI, the estimated quantity recoverable from Leviathan throughout the life of the field is around 635 Bcm (22.4 trillion cubic feet), similarly to the 21.2 Tcf earlier reported.
However, in view of the adoption of the FID, the vast majority of contingent resources have now been reclassified as reserves.
As a result, the total value of the Leviathan field has increased to about $18.7 billion, according to co-venturer and majority stakeholder NewMed Energy.
The Israeli company said that in 2025, the Leviathan partners sold about 10.9 Bcm of natural gas and 886,000 barrels of condensate for a gross financial consideration of some $2.23 billion.
NewMed said the increased production from Leviathan and the investment it entails will provide a long-term strategic response to domestic demand, thus guaranteeing Israel’s energy security.
“The expansion will also enable consummation of the historic agreement with Egypt for the export of around 130 Bcm of natural gas — the largest export agreement in the history of Israel,” said NewMed.
Leviathan began exporting gas to Egypt soon after coming on stream in January 2020.
“Pragmatic US and regional energy policies are helping to strengthen energy security across the Eastern Mediterranean and foster an environment that encourages investment in the Middle East and globally,” commented Clay Neff, president of Chevron upstream.
“Our decision to invest in the expansion of Leviathan’s production capacity reflects our confidence in the future of energy in the region,” added Neff.
NewMed added that plans are in hand to further expand Leviathan’s annual capacity to about 23 Bcm.
FID on this project – which could cost about $800 million – involves laying a fourth pipeline between the field’s deepwater wells and its platform, and drilling extra subsea wells.
An FID on this additional project “is expected to be adopted in the coming years,” said the Israeli partner.
Chevron operates Leviathan with a 39.66% interest on behalf of NewMed on 45.34% and Tel Aviv-listed Ratio Energies on 15%.
The stock prices of both Israeli players on the Tel Aviv Stock Exchange were up by about 3% on Friday.
The US operator’s other Eastern Mediterranean assets include the producing Tamar field – also offshore Israel, and the under-development Aphrodite gas field offshore Cyprus as well as assets in Egypt.
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