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Russian-Israeli offshore gas agreement signed

28th June 2012

Russian gas giant Gazprom plans to launch an Israeli subsidiary that will help develop Israel's vast offshore gas reserves, say sources

Russian company will help develop Israel's vast offshore gas reserves

Gazprom's Israeli subsidiary will focus on drilling as well as gas transmission from the Russia’s offshore fields, it emerged during a meeting with Russian president Vladimir Putin and Israeli prime minister Benjamin Netanyahu on Monday.

Gazprom has already expressed an interest in exporting LNG from Israel. All future international tenders issued by Israel in the gas sector would be open to Gazprom and other Russian companies, sources said.

In March the Tamar consortium, comprising Noble Energy, Delek Drilling, Avner Oil and Gas, Isramco and Alon Gas Exploration, held talks with Gazprom Marketing & Trading for the sale of 2 million-3 million mt/year of LNG from the Tamar offshore field. The field is expected to begin commercial production in April 2013.

Senior Gazprom officials have visited Israel a few times in recent months to discuss cooperation. In February, a delegation headed by Frederic Barnaud, director of Gazprom's LNG division, held talks with Noble Energy and Delek Group on possible cooperation. Gazprom is said to be interested in exporting gas from the huge Leviathan field off Israel's northern Mediterranean coast.

The Leviathan field has estimated resources of 20 Tcf and gas from here is earmarked for export while the Tamar field with reserves of 9 Tcf is expected to meet domestic demand. The Tamar field is due to begin commercial production during the second quarter of 2013. The Leviathan field is not likely to begin commercial production before 2016.

Last week Rosneft CEO Igor Sechin said at a press conference in St Petersburg that the company was looking at possible participation in the development of Israel's offshore gas fields. But the company has not received any "effective offers," he said.