Middle East

Champ gazier israélien offshore Tamar
PM Netanyahu, Energy Minister Shalom authorize Tamar gas field to go on with $500 million deal

Israeli Prime Minister Benjamin Netanyahu and Energy Minister Silvan Shalom authorized to export natural gas harvested at the Tamar field to Jordan, in a $500 million deal.

"This is a historic and significant agreement in Israel's foreign relations, and opens the door to additional agreements with countries in the region," said Shalom. "The natural gas agreement follows the Red Sea-Dead Sea Canal project and the water agreements I recently signed, all of which are indications of the strong relations being formed between the countries."

The Tamar partnership also recently signed a gas export contract with an Egyptian company, in an estimated $1.2 billion deal.

According to the agreement between Delek Group and Noble Energy, the chief partners in Israel's Leviathan and Tamar offshore gas fields, and Egyptian Dolphin Holdings Israel will export to its southern neighbor up to 5 billion cubic feet of gas worth 2.5 billion dollars over the next three years.

Avner Oil CEO and Delek Drilling Chairman, Gideon Tadmor, said the deal is a historic step for the state of Israel.

Last  Egyptian Oil Minister Sherif Ismail told The Wall Street Journal that Egypt is ready to take the controversial step of importing natural gas from Israel, if the price is right and if one of the gas companies involved in the deal drops legal action.

“We would approve the gas deal if it will meet domestic demand, offer high value for the Egyptian economy and if the international arbitration with one of the companies is resolved,” Ismail said.

The deal, which would provide up to 2.5 trillion cubic feet of gas over 15 years, was signed in May 2014 and included a preliminary deal between Houston-based Noble Energy Inc. to sell gas to Union Fenosa Gas.

Union Fenosa Gas has filed an international complaint against Egypt for breaching the May 2014 deal.

Though Egypt used to be a major regional gas exporter in the region, with Israel being one of its clients, the tables have turned in recent years, owing to several factors – including, in Egypt, instability in the Sinai Peninsula region – where several large fields are located – due to the rise of the Islamist insurgent group Ansar Bait al-Maqdis, and in Israel, the discovery of large off-shore gas fields.

Delek Group and Noble Energy, the chief partners in Israel's Leviathan and Tamar offshore gas fields, reached trade deals with Jordan and Egypt in September and October respectively. The deal with Jordan amounts to an annual $1 billion; the deal with Egypt to an annual $500 to $700 million.

Operators of the Tamar gas field are planning to build a pipeline to Egypt in a joint venture with Spanish and Italian companies, and if an agreement is signed, Israeli gas may begin flowing to Egypt as soon as 2017.

Noble operates the gas field with Israeli partners including Delek Drilling, Avner Oil Exploration, Dor gas Exploration and Isramco Negev 2.

Gas from a second, larger Leviathan field located about 130 kilometers west of the Israeli coastal city of Haifa, is expected to begin flowing in 2016.

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