ISRAEL’S NEWMED ENERGY LEANING TOWARDS FLOATING LNG EXPANSION

Jerusalem, Nov 24 (Reuters) – Israel’s NewMed Energy said on Thursday it was leaning towards building a floating liquefied natural gas (FLNG) terminal to further develop its Leviathan gas field off Israel’s Mediterranean coast.

The company has been weighing two options – an FLNG terminal which has seen support from Israel’s government, or connecting via pipeline to LNG terminals in north Egypt to facilitate exports further afield at a time when Europe is looking for non-Russian energy supplies.

“The floating (LNG terminal) is really where we are heading right now,” chief executive Yossi Abu told Reuters after NewMed issued third-quarter financial results that beat estimates.

At the same time, NewMed plans to spend $550 million to build a new pipeline to its platform to boost capacity to around 14 billion cubic meters (bcm) a year from the current 12 bcm.

“We are working to take an investment decision early next year,” Abu said.

“We are targeting to be … 21 bcm a year within this decade,” he added.

NewMed earned a net $123 million in July-September, compared with a $50 million loss a year earlier. Revenue net of royalties from natural gas rose 28% to $265 million in the quarter.

Production from Leviathan, in which NewMed owns a 45.3% stake, increased to 3.0 bcm in the period from 2.8 bcm a year ago, with 1.2 bcm supplied to Israel, 1.1 bcm to Egypt and 0.7 bcm to Jordan.

Over the first nine months of the year, 8.5 bcm of natural gas has been produced from Leviathan, NewMed said.

The company raised its 2022 sales estimate to 11.2 bcm from 10.65 bcm and also said it would pay a $50 million dividend, the same amount as the prior two quarters.

“In 2023 we will significantly speed up Leviathan’s expansion and entry into new markets, while strengthening the collaboration with our customers in Israel, Egypt and Jordan,” said Abu.

The company said discussions were continuing for its merger with Britain’s Capricorn Energy Plc and completion of the deal is expected in the first quarter of 2023. In recent weeks, a number of top Capricorn shareholders have come out against the deal.

But Abu downplayed the opposition and expected both companies’ shareholders to approve the merger. He projected significant growth potential from the combined entity.

“We view the transaction as a potential positive for NewMed, allowing the company to finally list its shares on the London Stock Exchange (LSE) and access that exchange’s wider pool of capital,” said Barclays analyst Tavy Rosner. “It could also leverage Capricorn’s global experience and track record as an explorer and upstream operator.”

(Reporting by Steven Scheer Additional reporting by Shadia Nasralla in London Editing by Kirsten Donovan and Mark Potter)

https://www.naturalgasworld.com/israels-newmed-energy-leaning-towards-floating-lng-expansion-102275

 

 

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