Austria firm, Israel strike gas seek deal

SYDNEY/JERUSALEM - Reuters

Australia’s Woodside Petroleum said it would buy a 30 percent stake in Israel’s Leviathan natural gas field, dealing a blow to Gazprom’s ambitions to cement its position as Europe’s dominant supplier and expand in the liquefied natural gas market.

Woodside, Australia’s biggest oil and gas firm, will take a 30 percent stake in Leviathan in a deal that could be worth $2.5 billion and adds a major player to the LNG market in Europe, the Middle East and Africa.

Gazprom, Russia’s gas export monopoly, which supplies around a third of Europe’s natural gas demand, had also bid for the project, which is expected to eventually export LNG to Europe and Asia. Other bidders included France’s Total and China’s National Offshore Oil Corporation , sources said.

Initial production for Israel’s domestic gas market is targeted for 2016, Woodside said. Analysts say the project could export LNG overseas by the end of the decade and that it is ideally situated to serve both Europe’s and Asia’s growing LNG markets. Some analysts estimate total offshore gas reserves in the region are in excess of 100 tcf, prompting interest in exploration in countries including Egypt and Turkey.