Noble Energy said Thursday it has authorized the first phase of the Leviathan natural gas project.
The company is currently targeting the end of 2019 for first gas from the offshore Israel field.
Noble Energy is the operator of the Leviathan Field.
The field contains 22 trillion cubic feet (Tcf) of gross recoverable natural gas resources.
Leviathan’s initial development will include four subsea wells, each capable of flowing more than 300 million cubic feet per day (MMcf/d) of natural gas.
Initial Leviathan proved reserve bookings associated with the investment are 3.3 Tcf net (9.4 Tcf gross) and are expected to be recorded in 2017.
Those reserves will translate into 550 million barrels of oil equivalent net for Noble, marking a 35 percent increase over the company’s total reserves.
Production will be gathered at the field and delivered via two 73-mile flowlines to a fixed platform, with full processing capabilities, located about six miles offshore.
The approved development plan allows for significant future cost-effective expansion from its initial 1.2 billion cubic feet per day (Bcf/d) capacity to 2.1 Bcf/d.
Noble estimates gross capital for phase one of Leviathan development will be $3.75 billion, with $1.5 billion net to Noble Energy.
That spend includes about $100 million spent in 2016 and about $200 million pre-investment for future platform expansion.
Noble said it can fund phase one of Leviathan through Tamar operating cash flows as well as Eastern Mediterranean portfolio proceeds.
The company said it is also securing access to a financing facility for additional funding flexibility.
Front-end engineering and design for the project are complete and Noble is now finalizing major project contracts.
Long lead materials procurement for the project has also begun.
Noble Energy and its partners anticipate drilling one to two Leviathan development wells in 2017.
Completion activity for all four producer wells, including two previously drilled, is expected in 2018.
Noble expects to complete project installation and initiate commissioning in the fourth quarter of 2019.
Noble is targeting sales volumes are 1 Bcf/d gross at the project’s startup.
Operating cash flow for the first year following startup is projected to be at least $650 million net and full project payout is expected within three years following startup at target volumes.
Noble said that, as of this week, it currently has firm gas sales agreements that account for up to 525 MMcf/d in total volumes from Leviathan.
Noble Energy operates Leviathan with a 39.66 percent working interest.
Delek Drilling holds a 22.67 percent stake, Avner Oil Exploration holds a 22.67 percent and Ratio Oil Exploration (1992) Limited Partnership holds a 15 percent stake.