This summary covers an application by Noble Energy Mediterranean Ltd., (NEML) of the Cayman Islands, for MIGA guarantees covering their equity investments in the Leviathan Field upstream development in Israel, against the risk of expropriation. The cover will be up to US$ 50 million. Further, NEML seeks cover against risk of breach of contract for its Natural Gas Sales and Purchase Agreement with National Electric Power Company (NEPCO) of Jordan. The cover will be up to US$250 million. Both guarantees have tenors up to 18 years.
The project entails the designing, financing, constructing and operating facilities associated with production of gas and condensate from the Leviathan Field in Israel. Gas produced will be sold domestically in Israel, as well as in Jordan under a Natural Gas Sales and Purchase Agreement with NEPCO, wholly-owned by Government of Jordan.
The project is a category A under MIGA’s Policy on Environmental and Social Sustainability. Click here for the project’s Environmental and Social documents. After conducting E&S due-diligence, MIGA will disclose its Environmental and Social Review Summary at a later date.
The project will allow Israel to develop and exploit its offshore natural gas resources, enhance energy security and become a net gas exporter. Natural gas production will provide a less polluting fossil fuel to meet the growing demand domestically. The project will promote regional cooperation through enhanced energy connectivity in support of the World Bank’s strategy for the Middle East and North Africa region, entitled Economic and Social Inclusion for Peace and Stability in the Middle East and North Africa. Jordan and Israel signed a peace treaty in 1994, which has led to enhance bilateral economic cooperation and trade. As a long term major private sector initiative, this project presents an opportunity to increase economic cooperation between the two countries.
Jordan will benefit from the diversification of energy supply sources and access to natural gas at lower prices than other alternatives. The lower cost of gas through this project will contribute to the financial sustainability of NEPCO and provide an affordable energy source to meet the growing demand. The supply of natural gas will contribute to energy source diversification and will support the growth of Jordan’s economy, including through the development of Jordan’s private sector.