Tamar partners consider developing 2 new gas fields

The aim is to win Israel Corp. natural gas tenders.

Sources inform ''Globes'' that the partners in the Tamar natural gas field are considering developing two more fields offshore from Ashdod and Ashkelon at an estimated cost of $250 million. The purpose is to improve the companies' chances of winning a natural gas supply contract with Israel Corporation (TASE: ILCO).

Delek Group Ltd. (TASE: DLEKG) subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) LP (TASE: DEDR.L) each own 15.625% of the Tamar gas prospect, alongside Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) with 28.75%, Noble Energy Inc. (NYSE: NBL) with 36%, and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Alon Energy Exploration Ltd. with 4%. Delek and Noble Energy are also partners in Yam Tethys, which sells natural gas from its field offshore from Ashkelon.

The companies are due to decide on the development of the Noa and Orr gas fields in a few weeks. Noble Energy will handle the development, and the two fields may be consolidated to result in the same distribution of ownership as in the Tamar field.

Israel Corp. is considered Israel's second-largest customer for natural gas, after Israel Electric Corporation (IEC) (TASE: ELEC.B22). A gas supply contract with Israel Corp. could be worth up to NIS 10 billion, and the Tamar partners are bidding against Egypt's East Mediterranean Gas Co. (EMG) for the contract.

Israel Corp. is in talks for the supply of gas to three subsidiaries: Israel Chemicals Ltd. (TASE: ICL); Mishor Rotem power station owner IC Power Ltd.; and Oil Refineries Ltd. (TASE:ORL), which operates its own power plant. ICL's Dead Sea Works already buys gas from Yam Tethys. Israel Corp. will also need to boost electricity production to meet the needs of electric car venture Better Place LLC.

Israel Corp. will need 2.1 billion cubic meters of gas a year, at its peak. The Tamar partners' main problem in winning the contract is that the Tamar field will only begin production in late 2012 and Yam Tethys' reserves are almost used up.

Published by Globes [online], Israel business news - www.globes-online.com - on April 6, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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