Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, Dec. 29 -- Noble Energy Inc. and its partners have signed a letter of intent to sell natural gas from Tamar field, off Israel, to Israel Electric Corp. Ltd. (IEC).
Noble Chairman and Chief Executive Officer Charles D. Davidson said the firm is upbeat about the LOI with IEC, which marks “a very important step” in the continuing development of the Tamar project.
“The progress on both the development and marketing of Tamar continues to move us along towards first production in 2012, consistent with our original projections," Davidson said.
Under the LOI, IEC expects to purchase at least 95 bcf/year of gas with the potential to procure higher quantities for a period of 15 years beginning at the startup of Tamar.
Noble estimates that total revenue for the 15-year period to be $9.5 billion using expected sales volumes and prices calculated with current oil futures' prices.
Nobel and its partners have now signed LOIs for gas sales from Tamar with cumulative total revenues estimated at $10.5 billion.
Additional discussions are continuing with a number of potential customers regarding the supply of Tamar gas. Nobel estimates total gross mean resources in Tamar of 6.3 tcf.
As part of a separate LOI, IEC expects to purchase gas from the Nobel and its partners to establish a strategic inventory reserve at Mari-B.
Mari-B partners would provide IEC with injection, storage, and withdrawal capabilities for this inventory under a related service agreement.
Israeli private power company Dalia Power Energies earlier signed an LOI to buy gas from the Noble group’s Tamar field (OGJ Newsletter, Dec. 21, 2009).
Noble operates Tamar, which lies in the Matan license, with a 36% working interest. Other stakeholders are Isramco Negev 2 28.75%, Delek Drilling 15.625%, Avner Oil Exploration 15.625%, and Dor Gas Exploration 4%.
Noble also is the operator of Mari-B with a 47.059% stake, while Delek Drilling has 25.5%, Avner Oil 23%, and Delek Investment 4.441%.
Contact Eric Watkins at [email protected].