Israel's Tamar Field Signs Second Domestic Gas Supply Deal This Week

By Sara Toth Stub

Special to DOW JONES NEWSWIRES

JERUSALEM--Partners in Israel's large offshore Tamar natural gas field Wedneday signed their second supply deal this week with private power producers.

The Tamar field will supply 4.5 billion cubic meters of gas to two private power companies over 15 years, likely worth $1 billion, said Avner Oil and Gas Exploration Ltd., a subsidiary of conglomerate Delek Group Ltd. (DLEKG.TV) and holder of a 15.6% stake in Tamar.

The companies that will buy the gas are Ramat Gabriel Ltd. and Alon Tabor Ltd., which are both building cogeneration plants with 55-megawatt capacities to supply power to factories. Both are both partly controlled by Delek Group.

This follows a $750 million deal signed Sunday in which the Tamar field will supply 3.3 billion cubic meters of gas over 15 years to Independent Power Production, which is fully owned by Delek Group and powers a water desalinization plant in southern Israel. The deals are subject to approval of Israel's antitrust authorities.

Although the Tamar partners didn't disclose a price for the deal signed with the two power producers Wednesday, the $1 billion figure is based on the amount that Independent Power Production will pay according to its agreement.

Other stakeholders in Tamar include U.S. -based Noble Energy Inc. (NBL), which controls 36%; Delek Drilling, also a Delek Group subsidiary, that holds 15.6%; and Isramco Negev 2 Ltd. Partnership, which owns 28.8%.

The field, discovered in 2009 and estimated to contain about 9 trillion cubic feet of gas, began production in March and has signed supply deals with other Israeli corporations, including the state-owned Israel Electric Co., which has committed to buying $15 billion in gas. The partners in the field also recently signed a deal to supply Jordan with $500 million worth of gas in Israel's first energy export deal.

The Tamar field along with the larger Leviathan field have raised hopes Israel will gain more energy security as well as boost its state coffers with taxes and other fees from gas exports in coming decades.

Write to Sara Toth Stub at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires