* Leviathan is potentially Israel's largest natural gasfield
* Supreme Court to decide on legality of deal (Adds details, PM/analyst/Noble comments)
By Steven Scheer
JERUSALEM, Dec 17 (Reuters) - After years of politicalinfighting, Israeli Prime Minister Benjamin Netanyahu signed adeal on Thursday giving long-awaited approval for thedevelopment of the Leviathan natural gas field off Israel'scoast.
But if and when the field actually gets developed is now inthe hands of Israel's Supreme Court. It will decide in thecoming months on the legality of the agreement after opponentsfiled an injunction request.
As part of the deal, Texas-based Noble Energy andIsrael's Delek Group, which discovered Leviathan in2010, will retain control of the field, but are being forcing tosell other, smaller assets.
Critics, including the Israel Antitrust Authority, arguethat control of the country's gas reserves by one consortiumwill limit competition.
Netanyahu pushed the agreement through by invoking anever-before-used clause in the anti-trust law that allows fordecisions of the Antitrust Authority to be overridden in thename of national security and international diplomacy.
"This (deal) is important for the economy, for security, forsociety and for our external relations," he said at the signingceremony, adding that he would soon meet Cypriot and Greekleaders to discuss energy matters in the Mediterranean.
Noble Energy said the deal "establishes the regulatorycertainty and stability necessary to proceed with Leviathan" aswell as the expansion of the nearby Tamar field, where Israelcurrently gets its gas for generating electricity.
POTENTIAL CUSTOMERS
Leviathan, with estimated reserves of 622 billion cubicmeters, will cost at least $6 billion to develop. It is meant to begin production in 2018-2020, although that timetable looksambitious, and supply billions of dollars' worth of gas to Egyptand Jordan, and possibly Turkey and Europe. )
Last month, Energy Minister Yuval Steinitz said he met withmore than 20 firms including ENI, Shell, Hess, Exxon Mobil and EOG in a bid to enticethem to invest in Israeli fields off its Mediterranean coast.
Some may be deterred, however, by the anti-trust battle.
"The court will want to examine it quite closely and treadcarefully," said Michael Barron, director of global energy andnatural resources at Eurasia Group.
"The anti-trust issues have been going on for a year and ithas not cast foreign investment in Israel in a good light. Itdefinitely has the potential to scare away investors and (makethem) think twice when it comes to large energy andinfrastructure projects."
Sharply lower oil prices have slashed capital investments byglobal energy and exploration firms, and other liquefied naturalgas projects are set to come online in the next three to fiveyears, which could lead to an oversupply.
But Israeli officials and business leaders said Leviathan would ultimately boost the state's coffers significantly andhelp companies improve competitiveness by reducing their energycosts. (Reporting by Steven Scheer; editing by Luke Baker and MarkTrevelyan)
Europa Oil & Gas (EOG)
