Noble Energy Inc. (NYSE: NBL) announced yesterday that it had obtained Israeli government approval to develop the Tamar natural gas field, after Minister of National Infrastructures Uzi Landau approved the company's plan to send the gas produced to the Yam Tethys platform offshore from Ashkelon, as "Globes" reported yesterday.
From the platform, the gas will be sent to the onshore gas terminal at Ashdod (the southern option), instead of the original plan to send the gas from Tamar to a terminal in the Hadera-Dor area (the northern option).
In its announcement, Noble Energy said that it would bring the gas to a new offshore platform to be constructed next to the existing Mari-B platform. The company added that the cost of this option was approximately the same as the Tamar north option. Previous reports estimate that Noble Energy and its partners will invest $2.8 billion in developing the Tamar field and bringing the gas to Israel.
Noble Energy proposed the southern option after the idea for building a gas terminal in the Hadera-Dor area aroused fierce opposition from local residents, who were able to delay the plan in the National Planning and Building Commission last month.
Noble Energy CEO Charles Davidson said, "The decision reached by the Minister of National Infrastructure on the proposed development plan paves the way for final sanctioning of this important project." He added, "While we are disappointed that a decision was not reached in a timely manner regarding a northern onshore terminal site, we are excited that an alternative development plan has been identified which has now received the necessary support of the Government of Israel. We continue to believe that Israel having a second gas receiving terminal in the northern half of the country provides significant benefits… We will continue to work with the National Planning Council and the involved ministries in evaluating northern sites as we believe ultimately one will be needed."
The announcement confirms reports by "Globes" that Noble Energy and its partners advise Landau and Petroleum Supervisor Yosef Mimram to approve use of the existing gas delivery infrastructure.
Noble Energy owns 36% of Tamar, Delek Group Ltd. (TASE: DLEKG) subsidiaries Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 15.625%, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) owns 28.7%, and Dor Alon Energy in Israel (1988) Ltd. (TASE:DRAL) unit Dor Alon Energy Exploration Ltd. owns 4%. Noble Energy also owns 47% of Yam Tethys and Delek Group owns 53%.
Yam Tethys's Mari B platform offshore from Ashkelon has been delivering gas to Israel since 2004, but its production is expected to begin declining sharply in late 2013. "Globes" reported that Landau approved the southern option, although ministry officials argued that it was strategically problematic, because it will force Israel to rely on just one gas terminal.
Noble Energy said in the announcement that it and its partners "planned to develop Tamar using an option (Tamar North) that would flow gas from the deepwater field to a new onshore receiving terminal to be constructed in the northern half of the country. However, the selection and approval of the site for the onshore terminal has been significantly delayed. The Tamar North development option was designed to deliver gas to Israeli markets in 2012 thus assuring that customers' gas needs would be continuously and fully met."
Delek Group's share price fell 1% to NIS 938 by early afternoon. Avner's share price fell 0.2% to NIS 2.16, Delek Drilling's share price fell 0.9% to NIS 12.07, but Isramco's share price rose 2.8% to NIS 0.55.
Published by Globes [online], Israel business news - www.globes-online.com - on August 11, 2010
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