Chevron's entry into Israel's Leviathan natural gas field will help deliver the technical and marketing nous to turn the project into a global supplier, said the CEO of Delek Drilling, the energy giant's new regional partner.
Chevron became the first energy major to enter the Israeli market when it agreed last month to buy Texas-based Noble Energy, which has stakes in Israeli offshore gas fields.
The deal was also the first big energy deal since the coronavirus crisis, which has crushed fuel demand and added to doubts about the fossil fuel industry's future as pressure mounts on energy companies to shift to renewable sources.
Chevron has said the acquisition strengthens its regional position and, over the long term, it expects population growth to drive demand for natural gas, which is less carbon-intensive than some fossil fuels.
Leviathan, Israel's largest field, began production late last year and exports to Jordan and Egypt, as well as supplying the local market.
Noble and Delek, the majority partners, had been keen on tapping into the liquefied natural gas (LNG) market at a second stage, although Israel has no infrastructure for it. Two options being studied are connecting to LNG terminals in Egypt or building a floating LNG terminal (FLNG).
"We don't have in our group the LNG capabilities," Delek Drilling CEO Yossi Abu told Reuters. "Chevron brings a significant LNG capability into the Leviathan project, and I'm sure that they will enhance our capabilities to take Leviathan from local and regional to a global supplier of gas."
The idea of a multi-billion dollar FLNG terminal, that would float in the eastern Mediterranean and allow exports to more distant markets, has been discussed for years.
Chevron, Abu said, will help from "a commercial perspective and marketing perspective, but for sure from a technical perspective to evaluate with us the capability to develop the FLNG project".
(Reporting by Ari Rabinovitch; editing by Barbara Lewis)