Houston-based Noble Energy and its partners approved the $3.75 billion Leviathan natural gas project offshore of Israel on Thursday.
The long-delayed project was debated in the Israeli Supreme Court before finally being authorized by the government last year.
Proponents like Israeli Prime Minister Benjamin Netanyahu touted the development as progress toward Israeli energy independence, while critics contended it gave too much of the profit to corporations.
Lead operator Noble Energy said the Leviathan field, which was discovered seven years ago, contains at least 22 trillion cubic feet of recoverable natural gas. Noble Chairman and Chief Executive David Stover said the authorization marks its third major natural gas development offshore of Israel for a total of 40 trillion cubic feet of gas.
“We can continue to grow our Eastern Mediterranean business for decades,” Stover said. “This includes material additional development beyond phase one at Leviathan.”
The $3.75 billion price tag is just for the first phase.
The goal for Israel is to switch more from coal to cleaner-burning, natural gas-fired electricity generation and to help further power an undersupplied region.
Netanyahu said in a prepared statement that the decision is great for the Israeli people and the economy.
“The move would give Israel gas supply, and promote cooperation with the countries of the region,” Netanyahu said in a statement translated from Hebrew.
Leviathan’s initial development will include four subsea wells, each capable of flowing more than 300 million cubic feet per day of natural gas and grow from there. The development plan allows for significant expansion from 1.2 billion cubic feet per day of capacity eventually up to 2.1 billion cubic feet a day.
Noble said it will fund much of its phase one costs through cash flows generated from its nearby Tamar gas field.
The drilling of wells will begin this year, according to Noble, with the first delivery of gas scheduled for late 2019.
Noble owns 39.66 percent of the Leviathan development. Israel-based Delek Group subsidiaries Delek Drilling and Avner Oil Exploration each own 22.67 percent. Israel’s Ration Oil Exploration holds the remaining 15 percent.