Funding for giant Israeli gas field to be tapped

Delek Group says first withdrawal from financial backing scheduled in a matter of days.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   May 12, 2017 at 7:58 AM

May 12 (UPI) -- Parties to the development of the Leviathan natural gas field off the coast of Israel said they're ready to tap into a loan to facilitate momentum.

Delek Group, alongside its partners at Avner Oil Exploration Ltd., sanctioned the giant Leviathan gas field in February and secured a loan agreement with dozens of banks, led by J.P. Morgan and HSBC, for about $1.75 billion to finance the project.

In a statement Friday, Delek said the partnership aims to make its first withdrawal from the account in the coming days.

"The first withdrawal funds shall be used, inter alia, for payment of the payment demands issued by the operator to the partners in the Leviathan project, as well as for the financing of part of the costs of the loan," the company said in a statement.

Delek Group and its partners in February said they'd spend about $3.75 billion on development of the first phase of Leviathan, which envisions a production capacity of about 1.2 billion cubic feet per day. The piping of gas to its slated destinations is expected by the end of 2019.

A good portion of the gas reserves in Leviathan are designated for exports. A Jordanian power company agreed last year to a take-or-pay scheme for gas from Leviathan. That agreement was worth an estimated $10 billion and was the first such agreement for the field.

In early December, the Leviathan partners said they reached an agreement with Dalia, the largest private power plant in Israel, to supply fuel for up to 20 years once production at the field begins.

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