MILAN, March 6 (Reuters) - Italian utility Edison is in talks to buy two Israeli gas fields from U.S. explorer Noble Energy and Israel's Delek Drilling, which are estimated to hold up to 70 billion cubic metres in total, two sources with knowledge of the talks said.
The Israeli and U.S. companies developing the massive Leviathan gas field off Israel's coast must sell their stakes in the two smaller fields to avoid being branded a cartel by the antitrust authority.
Edison, owned by France's EDF, is in talks to buy the Tanin and Karish fields offshore Israel, the sources said.
Edison officials could not immediately be reached to comment.
"The fields are between 50 and 70 bcm together, but a survey has to be concluded first to understand the exact size of the resource," one of the sources said.
Noble Energy and Delek Drilling have jointly discovered deposits of 29 trillion cubic feet offshore Israel since 2009.
Edison is already exploring offshore Israel for gas after acquiring licenses for the Neta and Roi sites, which cover an area adjacent to the 19 tcf Leviathan field that is vital to Israel's ambition of becoming an international gas exporter.
The talks are progressing slowly, however, due to tough terms set by Israel's antitrust authority such as forcing the operator to build costly infrastructure and at the same time restricting sales to Israel's domestic market.
Low gas prices in Israel at $5.50 per million British thermal units (mmBtu) combined with regulatory uncertainty make it difficult to justify big upfront investments, both sources said.
The companies hope the regulator could amend the terms to allow some of the gas from the fields to be exported or to allow Edison, or any other buyer, to lease capacity on existing or planned pipelines instead of financing them itself, the sources said.
Copyright 2017 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you