Houston, TX based Noble Energy [NYSE: NBL] has confirmed the presence of a 16 trillion cubic feet reserve of natural gas off of Israel's Mediterranean coast last week. The natural gas field, known as Leviathan, could be worth as much as US$90 Billion at current market prices. The Leviathan discovery would be the biggest such discovery in a decade.
The news about Leviathan comes one year after a separate natural gas field, Tamar, was discovered off the coast of the Haifa region. The Tamar field is thought to contain another 8 trillion cubic feet of natural gas and was also discovered by surveyors from Noble.
The two discoveries are considered game-changing. Because of oil rich Islamic states hostile to the nation of Israel, the Jewish state often ends up importing oil or natural gas from as far away as Norway or the UK. The Leviathan and Tamar gas fields mean that not only could Israel become self-sufficient for her energy needs but once production begins, Israel could be an energy exporter for the first time in her history.
Of course, with the discovery comes the question of what to do with the anticipated surpluses. Noble has proposed the construction of a LNG plant, which would require billions of dollars in additional investment. An undersea pipeline has also been proposed, but that doesn't seem as likely given the hostility of some of Israel's neighbors. Already, Lebanon has claimed that part of the Leviathan field is in Lebanese waters.
There's also the matter of taxes and revenue from natural gas production. Israeli lawmakers have recently proposed nearly doubling the taxes on domestic oil and natural gas production, meaning the governments take could be more than 50%.
Production for the Tamar field isn't expected to begin until next year.
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