Leviathan Gas Field Poised for Record Quarter with $840 Million in Revenue
Translated & summarized from Globes by baba
Israel's Leviathan gas field is projected to generate a record $840 million in revenue for the third quarter, driven by high oil prices and increased export capacity to Egypt and Jordan. The state expects to receive approximately $200 million in taxes and royalties. The Tamar gas field is also expanding its exports and production, with potential for a major deal with Egypt. Increased domestic demand from server farms may lead to future import needs for Israel.
The story in 5 lines · by baba
- Leviathan gas field revenue is projected to hit a record $840 million in Q3.
- The Israeli state expects to earn around $200 million in taxes and royalties.
- Infrastructure upgrades have significantly increased Leviathan's export capacity.
- Tamar gas field is negotiating a potential $20 billion export deal with Egypt.
- Israel may need to import gas by 2048 due to rising domestic demand.
The Leviathan gas field is expected to achieve its highest revenue quarter to date, with projections estimating approximately $840 million in the third quarter. This surge is attributed to high global oil prices and increased export capacity. The Israeli state is anticipated to collect around $200 million in taxes and royalties from these revenues.
Significant infrastructure upgrades, including the expansion of the EMG pipeline, have boosted Leviathan's export capacity by 2 billion cubic meters (BCM) annually. This enhancement allows for greater gas flow to key customers in Jordan and Egypt, with a recent deal to supply Egypt valued at $35 billion. The export price is linked to Brent crude oil prices, with the average price for the third quarter estimated at $6.55 per heat unit, leading to the projected revenue based on an estimated 3.5 BCM in sales.
The Tamar gas field has also increased its production capacity and is in negotiations for a substantial export deal with Egypt, potentially worth $20 billion if all partners join. While Tamar is more focused on the domestic market, about 40% of its gas is exported and influenced by global prices. Tamar has already begun paying the excess profits tax, unlike Leviathan, which is expected to start payments in 2028 after recouping its investments.
Looking ahead, Israel's domestic gas demand is expected to rise due to the expansion of server farms, which are attracted by the country's low electricity prices largely driven by affordable natural gas. However, this increased consumption, coupled with current extraction rates, suggests that Israel may need to import gas by 2048 unless new reserves are discovered or renewable energy significantly expands.
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