Tamar partners agree gas sale

Dalia Power Energies has agreed to purchase gas from the partners in the Tamar and Dalit Leases in the deepwater Levantine basin to fuel a proposed power plant on the Israeli mainland.

Offshore staff

TEL AVIV -- Dalia Power Energies has agreed to purchase gas from the partners in the Tamar and Dalit Leases in the deepwater Levantine basin to fuel a proposed power plant on the Israeli mainland.

According to a letter of intent, Dalia expects to purchase at least 200 bcf (5.6 bcm), over a 17-year period from the start-up of the power plant, which is expected during the second half of 2013. The actual quantity of gas that may be acquired could be smaller than the agreed quantity or up to 3.5 times larger: the figure will be determined according to the hours of operation, scope of consumption, and the power plant's final size.

The proposed power plant – which is subject to statutory approvals and financing - will be built at Tel Tsafit, adjacent to the Re’em Junction, and should generate up to 870 MW of electricity. The Tamar project partners estimate the value of the sale of around 200 bcf as at least $1 billion. Actual revenues will be influenced by factors including fuel and energy prices.

The letter of intent is non-binding, however the parties plan negotiations with a view to executing a binding supply agreement within the next few months.

12/15/2009

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