Woodside pulls out of an agreement to take a stake worth up to $2.7B in Israel's flagship Leviathan gas project, as the group developing the field shifts focus to regional markets.
MELBOURNE/JERUSALEM, May 21 (Reuters) - Australia's Woodside Petroleum pulled out of an agreement to take a stake worth up to $2.7 billion in Israel's flagship Leviathan gas project on Wednesday, as the group developing the field shifted focus to regional markets.
The deal's collapse more than a year after negotiations began will not affect development, the Leviathan partners said, and first production is still expected in late 2017.
Leviathan was discovered in 2010 in the eastern Mediterranean and was world's the largest offshore gas find of the decade. It holds an estimated 540 billion cubic meters of gas, most of which is earmarked to be sold abroad.
The U.S.-Israeli group developing the field first tapped Woodside, an expert in liquefied natural gas (LNG), in December 2012 to gain access to distant Asian markets.
Agreement on most issues was reached in the drawn-out negotiations, officials said, but talks hit a surprise snag in March when Woodside executives did not show up at the formal signing ceremony in Israel.
The delay was over a tax dispute. Talks between Woodside and Israeli authorities ensued, though analysts said relations soured with the Leviathan partners, which in the meantime pursued export agreements in neighbouring countries.
"All parties have worked very hard to secure an outcome which would be commercially acceptable, but after many months of negotiations it is time to acknowledge we will not get there under the current proposal," said Woodside CEO Peter Coleman.
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