Chevron Greenlights $2.36 Billion Leviathan Gas Field Expansion as Hanwha Ocean Wins Fabrication Contract

Chevron Mediterranean Limited and its partners have reached a Final Investment Decision (FID) on the $2.36 billion Phase 1B expansion of Israel's Leviathan gas field, marking the largest single offshore energy investment in the country's history. The decision, announced in January 2026 and now advancing into the engineering phase, will dramatically boost Israel's natural gas production capacity and strengthen its position as a regional energy exporter.

Massive Expansion Scope

The Phase 1B Stage 1 project includes drilling three additional deepwater wells, installing new subsea production infrastructure, and enhancing gas treatment facilities on the existing Leviathan platform. When completed, the expansion will increase total gas delivery capacity from the current 12 billion cubic meters (BCM) annually to approximately 21 BCM — a 75% increase that will support both growing domestic demand and lucrative export contracts with Egypt and Jordan.

Chevron, which operates Leviathan with a 39.66% stake, is joined by NewMed Energy (45.34%) and Ratio Energies (15%) in the consortium. All three partners approved the investment following years of regulatory negotiations and commercial planning.

Hanwha Ocean Secures Key Contract

In a significant development announced on March 5, 2026, South Korea's Hanwha Ocean secured the fabrication contract for the expansion platform modules. The award positions the Korean shipbuilding giant as a central player in Israel's deepwater energy buildout and reflects Chevron's global procurement strategy.

Separately, Chevron confirmed on March 3 the completion of a third gathering pipeline connecting additional subsea wells to the Leviathan platform, providing crucial infrastructure redundancy ahead of the expansion's commissioning, expected in the second half of 2029.

Force Majeure Complicates Timeline

The expansion's momentum faces a near-term challenge. In March 2026, Chevron declared force majeure on certain Leviathan obligations after Israel's Energy Ministry ordered a temporary production suspension on security grounds amid escalating regional tensions. Energy Minister Eli Cohen issued emergency instructions prioritizing natural gas for domestic consumption over export flows.

The force majeure declaration, while not expected to derail the long-term expansion, introduces uncertainty into delivery timelines and export contract commitments. Analysts at Bank Hapoalim estimate the suspension could delay certain engineering milestones by three to six months, depending on the duration of the security situation.

Strategic Significance

Despite the short-term disruption, the Leviathan expansion underscores Israel's transformation into a major gas producer. The Leviathan field, discovered in 2010, holds an estimated 605 BCM of recoverable natural gas and has already generated tens of billions of shekels in royalties and tax revenue for the Israeli government.

The expanded production capacity is expected to accelerate Israel's natural gas exports to Egypt through the existing East Mediterranean Gas pipeline and support a planned increase in cross-border flows of up to 60%, reinforcing Israel's role as an anchor of regional energy security.

"This investment decision reflects our long-term confidence in the Eastern Mediterranean gas basin," said a Chevron spokesperson. "Leviathan will remain a cornerstone of Israel's energy infrastructure for decades to come."