Woodside to Invest Up to $2.6 Billion in Israeli Gas Venture

From Bloomberg

By James Paton

Woodside Petroleum Ltd. (WPL), Australia’s second-largest oil producer, plans to buy a quarter of Israel’s biggest natural gas field for as much as $2.6 billion under a revised agreement as demand rises in the Middle East.

Woodside agreed to pay Noble Energy Inc. (NBL) and its partners in the Leviathan venture an initial $850 million when the deal is completed, due by the end of next month, the Perth-based company said today in a statement. The stake is smaller than the 30 percent negotiated in a December 2012 deal worth as much as $2.3 billion, though the estimated size of the resource rose to 18.9 trillion cubic feet of gas from 17 trillion cubic feet.

A deal would put Woodside in the middle of Israel’s nascent natural gas industry as the company’s proposed projects in Australia face delays. The original 2012 agreement was held up because of uncertainty over Israel’s export policy, while the venture partners also shifted the project focus from liquefied natural gas to pipeline shipments.

“Any time you can buy your way into a big pile of gas it’s not necessarily a bad thing,” Andrew Williams, a Melbourne-based analyst at RBC Capital Markets, said today by phone. “But there are still a lot of uncertainties” around how the project will take shape, he said.

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