Noble, Israel Electric in Tamar Gas Deal

Noble Energy said that it and its partners in the Tamar field have signed a gas sales agreement to sell natural gas from the Tamar field, offshore Israel, to Israel Electric Corporation Limited (IEC).

Under the 15-year agreement, IEC is expected to purchase approximately 2.7 trillion cubic feet (Tcf) of natural gas as fuel to provide electricity to the state of Israel and retains, under certain conditions, an option to expand the agreement quantity to approximately 3.5 Tcf.

Although actual revenue will be dependent upon purchased quantities and prices at the time of sale, the estimated total revenue for the 15-year period is $18 billion in the event IEC does not exercise its option and $23 billion if the option is exercised.

The gas price formula includes a base price and is indexed mainly to the US Consumer Price Index.

“We look forward to the start-up of gas deliveries from the Tamar field to meet the needs of the state of Israel,” said Charles D. Davidson, Noble Energy’s Chairman and CEO. “This clean burning fuel will reduce emissions and lower the cost of power generation. Tamar is on schedule to begin commissioning late this year with initial gas deliveries expected in April 2013.”

Noble Energy operates Tamar with a 36 percent working interest. Other owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent, and Dor Gas Exploration with the remaining four percent.

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LNG World News Staff, March 15, 2012