Israeli Offshore LNG in Gazprom's Mix for Asian Markets

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Gazprom OAO (OTC:OGZPY) (Moscow, Russia) has agreed to buy liquefied natural gas (LNG) from Israel's Tamar offshore gas field, which lies 80 kilometers off Israel's west coast city of Haifa. The deal, which took a year of negotiations, will cover the annual purchase of 4.2 billion cubic meters of LNG over 20 years by Gazprom.

Levant LNG, a joint venture between Daewoo (KSX:06805.KS) (Seoul, South Korea) and U.S. company Next Decade, is responsible for marketing LNG to potential buyers.

Gazprom is keen to diversify its gas delivery systems. In addition to pipeline delivery, it is looking to the lucrative LNG trading business with an eye on Japan, South Korea, China and India, where LNG prices are about double those obtained in Europe.

The Tamar project is being developed by the Tamar partnership of Noble Energy Mediterranean Limited, a wholly owned subsidiary of U.S. energy major Noble Energy Incorporated (NYSE:NBL) (Houston, Texas). Noble Energy Mediterranean Limited holds a 36% stake, with the balance held by Israel's Delek Group (31%) (TEL AVIV: DLEGK.TA), Isramco Neg-2 (29%) and Dor Gas (4%).

Production from the Tamar and Dalit fields is scheduled to start in April, and Israeli utility IEC has agreed to purchase 78 billion cubic meters of natural gas over 15 years. An export-oriented floating LNG facility and terminal is scheduled to go on stream in 2017.

The Tamar gas field has an estimated reserve of about 260 billion cubic meters.

For related information, see February 27, 2013, article - Israeli Gas Comes into Play as Jordan Books FRSU to Fill Egyptian Supply Gap.

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