Source: Noble Energy
Noble Energy, Inc. (NYSE:NBL) received government approval for the development of the 2009 Tamar gas discovery in the Mediterranean offshore Israel.
Until recently, Noble Energy and its partners planned to develop Tamar using an option (Tamar North) that would flow gas from the deepwater field to a new onshore receiving terminal to be constructed in the northern half of the country. However, the selection and approval of the site for the onshore terminal has been significantly delayed.
The Tamar North development option was designed to deliver gas to Israeli markets in 2012 thus assuring that customers' gas needs would be continuously and fully met. The Mari-B field located offshore Ashkelon, which is currently the country's only source of domestic natural gas, has been reliably meeting gas needs since 2004, but its production is expected to begin declining sharply in late 2013. Noble Energy operates both the Tamar and Mari-B fields.
Noble Energy and its Tamar partners recommended last week to Israel's Minister of National Infrastructure and the Petroleum Commissioner that a Tamar South development option be considered which would utilize the existing onshore gas receiving terminal located at Ashdod.
Tamar South would involve a similar field development as the northern option, but would bring the gas to a new offshore platform to be constructed next to the existing Mari-B platform and then redeliver the gas to the existing pipeline that connects Mari-B to the Ashdod onshore terminal. The new platform would take advantage of the structural design of the existing and proven Mari-B platform. The Tamar South development option would provide for initial deliveries of Tamar gas by late 2012. Cost of Tamar South is approximately the same as Tamar North.
"While we are disappointed that a decision was not reached in a timely manner regarding a northern onshore terminal site, we are excited that an alternative development plan has been identified which has now received the necessary support of the Government of Israel,” said Charles Davidson, Noble Energy’s chairman and CEO. “We continue to believe that Israel having a second gas receiving terminal in the northern half of the country provides significant benefits. However, it has also been made clear to us that the consequences to our customers, and ultimately the State of Israel, of delaying initial deliveries of Tamar gas by waiting for a northern terminal location are far too severe. Demand for natural gas is growing and today we are delivering record amounts of gas from Mari-B, which are being used primarily for electric power generation.
“The Mari-B partners are investing heavily in new wells and gas compression to maintain high gas deliverability for the next few years, but Mari-B gas reserves are finite and Tamar gas is needed soon,” he continued. “We will continue to work with the National Planning Council and the involved ministries in evaluating northern sites as we believe ultimately one will be needed. In the meantime we are pleased that the Tamar South option provides a fallback means for fulfilling Israel's near-term gas needs. The decision reached by the Minister of National Infrastructure on the proposed development plan paves the way for final sanctioning of this important project."