Israel Land Development Company Energy Ltd. (TASE: IE), controlled by Ofer Nimrodi, has signed a cooperation and development agreement with South Korea's Daewoo Shipbuilding & Marine Engineering Ltd. unit ENR Ltd. for a liquefied natural gas floating production, storage and offloading facility (LNG FPSO) for the offshore Myra and Sarah gas fields.
Subject to a successful outcome of a feasibility study, the companies will hold talks to set up a joint venture and will hold talks on a gas sales agreement for the sale of a minimum of three million tons of LNG (4.3 billion cubic meters of gas) a year by ILDC Energy to the joint venture over a 15-20 year period.
ILDC Energy and will assist ENR and the joint venture in obtaining all information, permits, and approvals needed for the LNG project, and ENR will make a best effort to find a comprehensive solution for building the project.
Regardless of the LNG project, ENR will consider investing in ILDC Energy. The size of the investment and its terms have not yet been determined.
The Myra and Sarah partners recently announced that exploratory wells would be drilled at the licenses in January-February 2012, and that the drilling might begin as early as this month. In late June, the license holders reportedthat a 3D seismic survey analyzed by Netherland Sewell & Associates Ltd. (NSAI) found a best estimate of 6.5 trillion cubic feet (TCF) of natural gas, with a 54% chance of geologic success. However, the low estimate is 2.9 TCF, below investors' expectations, which caused a sharp drop in the companies' share prices.
ILDC Energy and its affiliates Emanuelle Energy Ltd., Emanuelle Oil and Gas LP, and parent company Israel Land Development Company (TASE: ILDC) own 46.6% of Myra and Sarah, Modiin Energy LP (TASE:MDIN.L) owns 29.2% and its shareholder IDB Development Corp. Ltd. owns 5.3%, IPC Oil and Gas Holdings Ltd. (IPC) (TASE: IPC) owns 12.9%, and GeoGlobal Resources Inc. (AMEX: GGR) owns 5%.
ILDC Energy's share price fell 0.7% in morning trading to NIS 0.80, giving a market cap of NIS 679 million.
Published by Globes [online], Israel business news - www.globes-online.com - on December 15, 2011
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