Tamar gas through Ashdod gets tentative approval

The decision puts aside plans to build an onshore gas terminal for the Tamar field.

Minister of National Infrastructures Uzi Landau has approved in principal a plan by Noble Energy Inc. (NYSE: NBL) to send gas from the Tamar well via Ashdod, despite reservations by ministry officials. The decision puts aside plans to build an onshore gas terminal for the Tamar field. Previously, the idea to send gas from Tamar via the Yam Tethys drill platform was considered a temporary solution until the separate onshore terminal was built.

Ministry of National Infrastructures officials say that relying on a single delivery point for natural gas is strategically problematic. However, delays in approving the northern gas terminal forced Landau to conclude that there was no alternative to using the current infrastructure in the south.

A government source told "Globes" that Landau's decision "weighed the considerations of reliable supply and the start of the gas flow, which are critical for the Israeli economy."

Noble Energy CEO Charles Davidson proposed to Landau the plan to connect the Tamar well to the Yam Tethys well last week. The main advantage of this plan is its speed of implementation, as it will not require approval of the planning authorities. The National Planning and Building Commission delayed approving the onshore gas terminal in the north for Tamar in response to objections by local residents and local authorities. However, Israel's planning laws do not apply to the Yam Tethys platform, since it lies outside Israel's territorial waters.

Under Noble Energy's plan, the Tamar platform will be connected by a 110-kilomter undersea pipeline to the Yam Tethys platform at the Mary B well offshore from Ashkelon. Noble Energy will also upgrade the current undersea pipeline from Yam Tethys to the Ashdod gas terminal to boost the pipeline's capacity from the current six billion cubic meters a year to 8.5-10 billion.

Noble Energy's partners in Tamar Delek Group Ltd. (TASE: DLEKG), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Alon Energy Exploration Ltd. have not yet approved the plan, partly because they have not yet received permits from the Petroleum and Gas Authority to increase the capacity of the Yam Tethys-Ashdod pipeline. Noble Energy and Delek jointly own Yam Tethys.

Published by Globes [online], Israel business news - www.globes-online.com - on August 9, 2010

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

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