Daewoo signs Tamar gas field development deal

The agreement with Daewoo Shipbuilding to build a floating gas terminal could lead to Israeli gas exports to Korea.

Daewoo Shipbuilding & Marine Engineering Co. (KSX: 42660) said Tuesday that it has signed an initial agreement with the Tamar gas field partners that "could lead to a series of orders for LNG-floating production storage and offloading units."

"We expect to receive a series of orders to build high-end LNG-FPSOs" from the projects, a company spokesman said.

Earlier this month, "Globes" revealed that Daewoo Shipbuilding was on the verge of signing a multi-billion dollar 15 year contract to build and operate a floating liquefied natural gas terminal (FLNG), which will enable natural gas exports from the reservoir. The gas produced from the well will be cooled to minus 160 degrees Celsius for transport in liquefied gas tankers to South Korea. The price of natural gas in Korea is 2-3 times higher than in Israel.

Israel has significant reserves of 2.8 trillion cubic meters in its offshore areas, Daewoo Shipbuilding said in its statement today.

One of Tamar's partners Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) said last week that it had reached an initial agreement with Daewoo to build and operate a floating LNG facility for exports to South Korea and elsewhere. Isramco added that the companies would hold further talks to secure a contract for 15-20 years at a price between $7 and $9 per MMBTU.

The Tamar partners are Noble Energy Inc. (NYSE: NBL) which owns 36% of the gas field, Delek Group Ltd. (TASE: DLEKG) units Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L) each own 15.625%, Isramco Ltd. owns 28.7%, and Alon Natural Gas Exploration Ltd. (TASE: ALGS) owns 4%.

Published by Globes, Israel business news - www.globes-online.com - on November 22, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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