Israel's NewMed Energy leaning towards floating LNG expansion (updated)

1CM

24/11/2022 15:56

(Adds CEO/analyst comment)
    By Steven Scheer
       JERUSALEM, Nov 24 (Reuters) - Israel's NewMed Energy
 NWMDp.TA  said on Thursday it was leaning towards building a
floating liquefied national gas (FLNG) terminal to further
develop its Leviathan gas field off Israel's Mediterranean
coast.
    The company has been weighing two options - an FLNG terminal
which has seen support from Israel's government, or connecting
via pipeline to LNG terminals in north Egypt to facilitate
exports further afield at a time when Europe is looking for
non-Russian energy supplies.
    "The floating (LNG terminal) is really where we are heading
right now," chief executive Yossi Abu told Reuters after NewMed
issued third-quarter financial results that beat estimates.
    At the same time, NewMed plans to spend $550 million to
build a new pipeline to its platform to boost capacity to around
14 billion cubic meters (bcm) a year from the current 12 bcm.
    "We are working to take an investment decision early next
year," Abu said.
     "We are targeting to be ... 21 bcm a year within this
decade," he added.
    NewMed earned a net $123 million in July-September, compared
with a $50 million loss a year earlier. Revenue net of royalties
from natural gas rose 28% to $265 million in the quarter.
    Production from Leviathan, in which NewMed owns a 45.3%
stake, increased to 3.0 bcm in the period from 2.8 bcm a year
ago, with 1.2 bcm supplied to Israel, 1.1 bcm to Egypt and 0.7
bcm to Jordan.
    Over the first nine months of the year, 8.5 bcm of natural
gas has been produced from Leviathan, NewMed said.
    The company raised its 2022 sales estimate to 11.2 bcm from
10.65 bcm and also said it would pay a $50 million dividend, the
same amount as the prior two quarters.
    "In 2023 we will significantly speed up Leviathan's
expansion and entry into new markets, while strengthening the
collaboration with our customers in Israel, Egypt and Jordan,"
said Abu.
    The company said discussions were continuing for its merger
with Britain's Capricorn Energy Plc  CNE.L  and completion of
the deal is expected in the first quarter of 2023. In recent
weeks, a number of top Capricorn shareholders have come out
against the deal.
    But Abu downplayed the opposition and expected both
companies' shareholders to approve the merger. He projected
significant growth potential from the combined entity.
    "We view the transaction as a potential positive for NewMed,
allowing the company to finally list its shares on the London
Stock Exchange (LSE) and access that exchange's wider pool of
capital," said Barclays analyst Tavy Rosner. "It could also
leverage Capricorn’s global experience and track record as an
explorer and upstream operator."
 (Reporting by Steven Scheer 
Additional reporting by Shadia Nasralla in London 
Editing by Kirsten Donovan and Mark Potter)
 ((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters
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