Tamar partners agree on sale of more offshore Israel gas

Offshore staff

HOUSTON – Noble Energy and its partners have signed a gas sales agreement to provide supplies from the Tamar field offshore Israel to Israel Electric Corp. Ltd. (IEC).

Under the 15-year agreement, IEC is set to purchase around 2.7 tcf of natural gas as fuel to provide electricity to the state of Israel, with an option to expand the volume contracted to around 3.5 tcf.

Noble estimates total revenue for the 15-year period at $18 billion if IEC does not exercise its option and $23 billion if it does. The gas price formula includes a base price and is indexed mainly to the US Consumer Price Index.

The transaction remains subject to final Israeli government approval.

The Tamar partners now have sales agreements with six different buyers for Tamar’s gas in the range of 3.9-4.7 tcf, resulting in estimated total revenues of $27-32 billion over a 15 to 17-year period.

Commissioning of the Tamar facilities should start later this year with first gas deliveries scheduled for April 2013.

3/19/2012

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