Wednesday, December 15, 2010

EMG, Israel Corp in Deal on 1.4 Bcm-2.9 Bcm/year Gas Supplies

by Platts, December 13, 2010
[Egypt's] East Mediterranean Gas Supply Corp has signed agreements to supply 1.4 billion cubic meters of natural gas to three companies controlled by the Israel Corp., according to a statement Monday by Ampal-American Israel Corp.

The statement said that the agreements are for a total of 1.4 Bcm a year for 20 years with an option to increase the total to 2.9 Bcm/year. The total value of the five contracts with Oil Refineries Ltd, Israel Chemicals and OPC Rotem was put at $5 billion-$10 billion.

Gas supplies are scheduled to commence in the second quarter of 2011. The agreement was seen as a setback for the Tamar consortium which was hoping to clinch the entire deal. The Tamar consortium comprises Noble Energy Inc., Delek Drilling, Avner Oil and Gas, Isramco and Dor Gas. A source close to the Israel Corp said that it had left open the remaining 1.5 Bcm of purchases. Israeli energy industry sources said that this could eventually go to the Tamar consortium. Israeli energy industry sources said Monday's announcement could have a detrimental impact on the development of the Tamar field which was scheduled to begin commercial deliveries in 2013. ...

(EMG is a joint company owned by Egyptian businessman Hussein Salem, Egypt Natural Gas Company, Thailand's PTT, Israel's Merhav Group, Ampal-American Israel Corp, American businessman Sam Zell and Israeli institutional investors. -- D.R.)

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