Woodside Set For Landmark Israel Gas Deal But Hurdles Remain



Reuters

MILAN/LONDON, March 26 (Reuters) - Australia's Woodside Petroleum on Thursday is expected to confirm plans worth up to $2.71 billion to take a 25 percent stake in Israel's giant Leviathan gas field but differences over profit sharing threaten to slow plans for exports.

Woodside is set to sign a landmark deal for a stake in the 19 trillion cubic feet field, capping more than a year of negotiations and debate over export quotas.

As a liquefied natural gas (LNG) specialist, Woodside is seen as a key player in Israel's' bid to sell the super-cooled gas to distant markets in Asia and South America.

Leviathan's two other main shareholders are U.S. explorer Noble Energy and Israel's Delek Drilling.

Yet in behind-the-scenes discussions between the government and shareholders, including Woodside, there remain tensions over aspects of the project, diplomatic, industry and analyst sources told Reuters.

"The government recently asked Woodside to take half as much of the profit from exports to Asia as it had first agreed," one industry source said.

A separate investor source said Woodside, which initially agreed to take an 18 percent profit share of Israeli gas exported to Asia, was offered just eight percent by the government a month ago.


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