(MENAFN - ProactiveInvestors - Australia) Woodside Petroleum (ASX: WPL) has acquired a 30% interest in the Leviathan gas field off Israel that could form the basis of a liquefied natural gas project.
The acquisition will attract an initial upfront payment of US696 million.
Leviathan, operated by Noble Energy (NYSE: NBL), is estimated to contain about 17 trillion cubic feet of gas.
Under the agreement, Woodside will be the operator of any LNG development of the field, which straddles the 349/Rachel and 350/Amit petroleum licences.
Noble will remain the upstream operator and targets initial production to the domestic gas market in 2016.
A Pre Front-End Engineering and Design assessment for an LNG project is underway.
Besides the upfront payment, Woodside will also make the following contingent payments.
- A payment of US200 million once laws permitting LNG export from Israel are in force;
- A payment of US350 million on a final investment decision in relation to an LNG development;
- Potential annual LNG revenue sharing payments equal to 11.5% of Woodside's incremental revenue above an agreed escalating price threshold, over the life of the project (capped at US1 billion); and
- Carry of expenditure up to US50 million in relation to costs associated with the drilling of a deep oil exploration well targeted for late 2013.