The partners in the Tamar gas field, Delek Drilling, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), Noble Energy and Avner Oil and Gas LP (TASE: AVNR.L) have signed an agreement with Alon Gat Energy Centers of the Dor-Alon group for the purchase of 1.68 BCM of gas from Tamar over 15 years, for $400 million. Dor Alon owns 4% of the license through Dor Gas Exploration.
Dor Alon is buying the gas for its installations in the Kiryat Gat industrial zone, and a power plant, which are intended to supply the energy needs of Sugat's sugar refinery. The agreement gives Dor Alon the right to reduce the amount of gas purchased if it does not build the power plant.
Supply of gas under the agreement is due to start in 2014, and to last for 15 years or until Dor Alon consumes the quantity of gas specified. The Tamar partners estimate the agreement to be worth $400 million on the assumption that the buyer builds the power plant and there is no reduction in the quantity of gas supplied.
Delek Drilling CEO Yossi Abu said, "The agreement is part of the process of introducing natural gas into Israeli industry such that the use of polluting fuels will decline. Alongside the substantial improvement in the quality of the environment, the natural gas revolution will reduce Israeli industry's energy costs and enable products to be sold more cheaply to Israeli consumers, as well as making Israeli industry more competitive in the global marketplace."
Published by Globes [online], Israel business news - www.globes-online.com - on December 10, 2012
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