Appraisal drilling at the massive Leviathan gas field offshore Israel has led to an increase in its estimated resources, but development remains on hold until the country’s government grants approval for liquefied natural gas (LNG) exports.

The Noble Energy-led consortium developing Leviathan has boosted estimated gross mean resource by a trillion cubic feet (tcf). “We finished an appraisal well in the first quarter at Leviathan, which increased our gross mean resource estimate at the field to 18 tcf,” said Noble Energy Chief Executive Chuck Davidson during the company’s first-quarter earnings call on Thursday.

This brings combined estimated gross mean resources at Leviathan and Tamar, another Noble-operated field offshore Israel, to 28 tcf, following a similar 1 tcf increase in the resource estimate for Tamar.

Tamar, which supplies the Israeli market, began producing in the first quarter. “We’re supplying natural gas to Israel at a higher [production] rate than we ever have before,” Davidson said.

The field has a maximum production capacity of around 1 billion cubic feet (bcf) per day. Noble has tested deliveries of up to 950 million cubic feet (MMcf) per day, and “we expect the facility to deliver at full capacity during the peak summer demand period in the third quarter”, Davidson said.

Citing expectations of strong Israeli demand growth, Noble is planning to move forward with a second phase at Tamar, to bring capacity to around 1.5 bcf/d by 2015.

“Israel Electric Corporation recently exercised its option to increase the amount of natural gas it will purchase from Tamar,” Davidson said. The company and its partners announced in 2012 that Israeli Electric Company had signed a 15-year agreement to buy 2.7 tcf from Tamar, which could be increased to 3.5 tcf.

Tamar’s second phase “is actually needed to support the Israel Electric exercising their option to expand their gas take”, Davidson said.

While robust projections for Israeli gas demand are propelling further development at Tamar, they have also thrown a monkey wrench into Noble’s push to develop Leviathan gas for export as LNG. As in the US, the discovery of massive, viable gas resources in Israel has led to new opportunities to export, as well as calls from some quarters to reserve domestic resources for domestic use. Formulating energy policy in a country that has quickly transitioned from resource-scarce to resource-rich takes both time and political wrangling.

“A new coalition government was recently formed in Israel, and the new leaders are becoming familiar with the items on the country’s energy policy agenda, which includes energy exports,” said Davidson, adding that he expected export policy to be high on the new leadership’s agenda.

Resolution of the issue will be critical to the consortium’s hope to sanction a Leviathan development project by the end of this year. The consortium announced an agreement in December to sell a 30% working interest in its licenses at the field to Australia’s Woodside. The deal terms involve Woodside providing three cash payments – one at closing, one when Israeli law officially permits LNG exports, and one upon reaching final investment decision (FID) on an LNG export project.

“Clarity on an export policy is essential as we finalize the farm-out agreement with Woodside, which in turn will bring us closer to sanctioning the first phase at Leviathan,” Davidson said.

“Both the Woodside CEO and myself have made comments that it’s important that the government make some decisions so that we can move on,” said Davidson. “We really can’t make good decisions on how to develop Leviathan without having fully defined what the rules will be for export.”