Sources inform "Globes" that the Ministry of National Infrastructures has demanded that the Tamar partners begin immediate construction of an additional pipeline from the offshore gas field. The ministry is insisting that the pipeline be completed before gas begins flowing from Tamar in mid-2013.

The demand is a result of the disruptions in the supply of Egyptian gas and the higher than expected demand for gas from Tamar. The ministry says that the single planned pipeline will not be enough to meet expected gas demand in Israel in 2013. The Tamar partners claim that the demand to build another pipeline by mid-2013 is not feasible in terms of time and that they are anyway not legally committed to build an extra pipeline.

The plan, dubbed the second stage of the Tamar field's development, includes laying the pipes from the production rig to the existing Ashkelon terminal, building a reception terminal and linking the installation to the national gas network. The cost of the project is yet to be published but Clal Finance analyst Yaron Zer believes it will cost $500-800 million.

Such financing would significantly increase the credit that the Israeli partners will need to raise. The current cost of the project is already more than $2 billion.

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

Published by Globes, Israel business news - www.globes-online.com - on December 5, 2011

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