Under the headlines of “Gazprom is Getting Israel’s Gas”, Russian newspaper has mentioned on Saturday that Israeli natural gas reserves have greatly exceeded expectations, thus Israel would be no longer independent on others but other countries and Russia, in particular, would be dependent on the Israeli gas markets.
The partners in the Tamar field said that they had signed a letter of intent to begin non-exclusive and non-binding talks with Gazprom Marketing & Trading Switzerland for the annual sale of 2 million to 3 million tonnes of LNG over 15 to 20 years starting in 2017.
The price will be based on prices for LNG in Asia or another agreed-upon price mechanism.
Gazprom declined to comment, but one of the company’s major goals is to grab a greater share of Asia’s LNG market, especially after talks to supply China with pipeline gas have stalled.
In November of 2011, South Korea’s Daewoo Shipbuilding & Marine Engineering Co agreed with field partners Noble Energy, Israel’s Delek Group and Isramco Negev to develop Tamar via floating production, storage and offloading (FPSO) vessels.
Daewoo had said it aimed to produce LNG from the field, which has estimated reserves of 9.1 trillion cubic feet of gas, from the end of 2016 if all the processes for the final deal remained on track.
Clal Finance analyst Yaron Zer said the negotiations with Gazprom were a positive development for Tamar.
“Finding a buyer for the gas will increase Daewoo’s motivation to establish a (floating LNG) terminal,” Zer said, adding that a finalised deal with Daewoo would add $1 billion a year in sales for Tamar starting in 2017.
Tamar is a joint venture between the U.S. company Noble Energy (36%), Isramco (28.9%), Delek Drilling and Avner Oil and Gas Exploration.
Israel gets most of its electricity from the natural gas supplied through sabotage-vulnerable Egyptian pipelines, though Israeli authorities have said the country must find ways to become self-sufficient in energy.
