Repair of the malfunction discovered during routine maintenance work at the Tamar natural gas reservoir will probably be completed only at the end of next week, sources inform "Globes." The Ministry of National Infrastructure, Energy, and Water Resources announced two days ago that the flow of natural gas to the economy had been halted as a result of the malfunction. The initial estimates were that the repair would take only 24 hours.
The estimate was later revised to 48 hours. Last night, it was reported that the scheduled date was Wednesday, while professional sources at Noble Energy now believe that the repair will be completed in the coming week, after which the gas production will be resumed. The damage to the Tamar partners resulting from the decrease in gas sales by 0.1 BCM is estimated at $15 million, including the relatively negligible cost of the repair.
The immediate report to the Tel Aviv Stock Exchange (TASE) by Delek Drilling Limited Partnership (TASE: DEDR.L) stated, "The malfunction is not expected to have a substantial effect on the partners' revenue from sales of natural gas in the third and fourth quarters of 2017," because the extent of the damage is small in comparison with the company's $123 million in revenue over the past quarter.
Noble Energy explained that the crack was discovered in one of the pipes connected to the ventilation pipe. The rule states that the platform must be shut down until the malfunction is completely repaired. The company added that although the crack could be soldered, it had been decided to replace the entire damaged part, a safer, but lengthier, option. Sources inform "Globes" that the replacement part has already reached Israel, and tests for connecting it are now taking place.
The Ministry of National Infrastructure, Energy, and Water Resources' estimates for repair of the malfunction on which its policy for an emergency and allocation of liquefied natural gas (LNG) was based was by Wednesday, and it is now unclear whether the ministry is prepared for a lengthier halt in the supply of natural gas. As a result of a fourth delay, concern is growing concerning an electricity outage next week during the transition from gas to diesel, which could cause damage to both industry and households.
All the power plants in Israel have switch to the use of alternative fuels, such as diesel, fuel oil, and coal, including the outmoded power plants Orot Rabin in Hadera and Rotenberg in Ashkelon, where production had been scheduled to end shortly. The stock of diesel fuel ran out at some of the Israel Electric Corporation (IEC) (TASE: ELEC.B22) power plants, and they have begun using fuel oil, which generates more pollution.
The Ministry of National Infrastructure, Energy, and Water Resources is now trying to makes the supply of LNG on the Floating Storage Regasification Unit (FSRU) last until October 2, when an LNG tanker will refill the FSRU. Energy industry sources are hoping that Noble Energy will fulfill its promises and repair the malfunction by then.
If the malfunction is repaired only next Sunday, three days later than the planned date, there will be another increase in the electricity bills for September and more severe air pollution. An increase in electricity bills is already certain, for two reasons: diesel fuel is more expensive than natural gas, and use of the FSRU will increase transportation and maintenance costs.
The existence of an additional pipeline does not ensure the continuation of the gas supply, because the malfunction took place on the platform itself, and the extra pipeline is of no use.
The Tamar partners stated, "The reliable flow of gas from Tamar has enabled to economy to substantially cut back on the use of polluting fuel, and has helped to reduce air pollution by a great deal. The Tamar partners pointed out in previous years the difficulty and consequences of the Tamar reservoir's status as the sole supplier of natural gas to the economy, and called for measures to promote the development of additional gas reservoirs, as indeed was done in the gas plan."
Published by Globes [online], Israel Business News - www.globes-online.com - on September 24, 2017
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