Turcas Petrol AS (Istanbul: TRCAS) has notified the Istanbul Stock Exchange that its gas subsidiary has initiated negotiations together with Enerjisa and its German partner E.On EN (XETRA: EOAN) to buy natural gas from Israel's Leviathan field, for domestic customers.
In late March, "Globes" reported that Turkish and multinationals had submitted more than ten bids to buy 7-10 billion cubic meters (BCM) of gas a year from Leviathan, amounts that could generate $25-35 billion revenue, assuming a 15-year gas supply contract at $6.50 per million British Thermal Units (mmBTU), a higher price for natural gas than in Israel's domestic market. Turcas's notice was the first official statement of such negotiations.
Noble Energy Inc. (NYSE: NBL) owns 39.66% of Leviathan, Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 22.67% and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15%.
Israeli gas would be delivered to Turkey via an undersea pipeline from a floating production, storage and offloading (FPSO) ship at Leviathan. Leviathan's partners want the buyers to build the infrastructure, with the price of gas set at the production point.
The partners in Leviathan are reviewing the bids, their financial proposals, commercial terms, including the take or pay rate, and the amount of gas purchased. Some of the bidders are willing to build the pipeline themselves, while others prefer to build with Leviathan's partners.
Published by Globes [online], Israel business news - www.globes-online.com - on April 23, 2014
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