TEL AVIV—Investors in Israel's largest natural gas field on Monday agreed with Jordan's national power company to supply it with gas worth up to $10 billion, in a deal that could jump-start Israeli hydrocarbon exports.

Houston's Noble Energy Inc. and its partners in the Leviathan gas field will supply Amman-based National Electric Power Co. with 1.6 trillion cubic feet of gas over 15 years, the company said.

Leviathan is the largest natural gas reserve in Israeli waters and the country's officials hope development of the field can spur regional exports and deepen economic and diplomatic ties with some of its traditionally hostile neighbors such as Jordan, which has few energy sources of its own.

Israel's Prime Minister Benjamin Netanyahu in May approved amended terms for development of Leviathan after months of legal wrangling that had stunted the growth of the domestic hydrocarbon industry.

Israel's highest court in March ruled against an initial framework to develop the country's offshore fields. It called the deal unconstitutional, citing a clause that gave energy companies pricing and regulatory stability for 10 years regardless of potential shifts in the government or its policies.

Noble is the largest stakeholder in the Leviathan field, which has an estimated 22 trillion cubic feet of gas, or enough to supply Israel for 100 years. Other interest owners are Israeli companies Delek Drilling LP, Avner Oil Exploration LP and Ratio Oil Exploration LP.

The firms in 2014 signed a letter of intent to sell roughly 1.6 trillion cubic feet of natural gas to Jordan's National Electric Power Co. over 15 years from Leviathan.

The deal and development of Leviathan, however, was impacted by the internal legal and regulatory hurdles in Israel, delaying completion of talks between Israeli and Jordanian officials.

Noble now expects to deliver its first gas from the field in 2019 or 2020, it said.

The Leviathan group and Israeli officials also have held talks for larger export contracts with companies in Egypt and Turkey, although the discussions have hit obstacles.

Egypt froze plans last year to import Israeli gas after an international arbiter ruled that the North African country's state-owned energy companies owed $1.76 billion to state-owned Israel Electric Corp., or IEC, demanding that Israel drop this and another arbitration case over gas.

Israel signed peace agreements with Egypt in 1979 and Jordan in 1994, and the countries now coordinate extensively on security issues.

But conducting business with Israel has proved divisive in the Middle East. Economic ties with both Egypt and Jordan have failed to grow significantly, despite the peace treaties.

Jordan has no proven and exploitable oil and gas reserves. It has long relied on Egypt for imports of gas, but supplies have become erratic since the Arab Spring in 2011 when militants in the Sinai Peninsula began attacking a pipeline between the two countries.

Amid the disruptions and rising domestic energy demand, Jordan has increasingly sought alternative supplies.

Noble Energy also owns a stake in one of Israel's smaller fields, Tamar, which is already producing gas.

The Houston firm signed an agreement in 2014 with Jordan Bromine Company and the Arab Potash Company, both based in Amman, for exports from Tamar. Delivery of that gas will begin in late 2016, Noble said Monday.

Write to Rory Jones at rory.jones@wsj.com

 

(END) Dow Jones Newswires

September 26, 2016 11:55 ET (15:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
Noble Energy (NYSE:NBL)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Noble Energy Charts.
Noble Energy (NYSE:NBL)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Noble Energy Charts.