TEL AVIV -- Delek Drilling and Avner Oil Exploration have signed a letter of intent with Israel Electricity Corporation concerning the supply of gas from the Tamar Project in the Levantine Basin offshore Israel.
The agreement also involves the other partners in the Ashkelon and Noa Leases (the Yam Tethys Project) and in the Tamar and Dalit Leases (the Tamar Project).
Under the arrangement, the parties will enter into negotiations for the sale of at least 2.7 bcm/yr of gas from the Tamar Project to Israel Electric, and possibly much more, over a 15-year period.
Annual revenues from this sale are estimated in the range $400-750 million. Actual revenues will be based on various factors, including global fuel prices at the time of supply and the actual quantities of gas purchased by Israel Electric. According to Delek, Tamar’s operator Noble Energy assesses revenues from the sale of the total quantities of gas, under the terms of the letter of intent, at $9.5 billion.
Following another letter of intent involving Israel Electric and the Yam Tethys Project partners, the utility will also begin negotiations to purchase a strategic inventory of natural gas, and will procure injection, storage and extraction services for this gas, for use in the near-shore Mary-B reservoir.
Under a third letter of intent involving the Yam Tethys and Tamar project partners, this strategic inventory will be supplied by the gas from the Tamar Project, subject to agreements between the two sets of partners.
These letters of intent are non-binding, however Israel Electric aims to execute binding supply contracts within a period of six months.