The Tamar gas field rights owners - Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Alon Natural Gas Exploration Ltd. (TASE: ALGS) - have asked the Natural Gas Authority to allow them to lay a second pipeline to the coast. The 10-inch pipeline will carry condensate from the field. Since the Tamar field currently delivers little condensate, the pipeline can also carry natural gas, subject to approval of the Natural Gas Authority and the Southern Regional Planning and Building Commission. The new pipeline would boost natural gas deliveries to the Israeli market by 10%.
Gas from Tamar is currently delivered via a 30-inch pipeline from the production platform offshore from Ashdod to the onshore terminal by the Ashdod Port. The pipeline can deliver 44,000 million British Thermal Units (mmBTU) of gas per hour. The condensate pipeline would boost the rate to 48,000 mmBTU. Compressors would be needed to boost output to 50,000 mmBTU.
Another way to boost output would be to use the Mari B reservoir of Yam Tethys (owned by Delek and Noble Energy) as an operational reserve, but there has been a rise in pressure in the reservoir lately that is liable to render this option uneconomical.
Increasing natural gas deliveries from Tamar is critical for Israel, which is liable to face a gas shortage by the summer of 2015. Independent electricity producers, factories, and electricity consumers could be the main victims of such a shortage, as they will be forced to absorb electricity price hikes. The real, long-term solution to the problem is the construction of a second onshore terminal, but plans for it are stuck.
The Ministry of Energy and Water Resources says, "The Natural Gas Authority at the ministry supports the request, subject to obtaining all the necessary permits. This is one act of several that the ministry and the Natural Gas Authority are undertaking to boost natural gas deliveries to the Israeli economy."
Published by Globes [online], Israel business news - www.globes-online.com - on October 8, 2013
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