Independent energy company, Noble Energy Inc and partners in the Tamar field have signed a sales agreement to sell natural gas from the Tamar field, off the shores of Israel, to Israel Electric Corporation Limited (IEC).
Under the 15-year agreement, IEC is expected to purchase approximately 2.7tr cubic feet (Tcf) of natural gas as fuel to provide electricity to the state of Israel. Under certain conditions, there is an option to expand the agreement quantity to approximately 3.5 Tcf.
Although actual revenue will be dependent upon purchased quantities and prices at the time of sale, the estimated total revenue for the 15 years is USD 18bn in the event IEC does not exercise its option and USD 23bn if the option is exercised.
"This clean burning fuel will reduce emissions and lower the cost of power generation. Tamar is on schedule to begin commissioning late this year with initial gas deliveries expected in April 2013,” said Charles D. Davidson, Noble Energy's Chairman and CEO.
As a result of this and previously announced agreements, the Tamar partners have sales agreements for natural gas quantities in the range of 3.9 to 4.7 Tcf with six different customers, resulting in estimated total revenues between USD 27bn and USD 32bn over a 15 to 17 year period.
Noble Energy operates Tamar with a 36 per cent working interest. Other owners are Isramco Negev 2 with 28.75 per cent, Delek Drilling with 15.625 per cent, Avner Oil Exploration with 15.625 per cent, and Dor Gas Exploration with the remaining four per cent.
The agreement is subject to final government approval, which is expected, according to Noble Energy.