Noble Energy, Inc. (NYSE: NBL) today announced the execution of a non-binding Letter of Intent (LOI) between the Tamar field partners and Union Fenosa Gas SA (UFG) for the supply of natural gas from Tamar, offshore Israel, to UFG's existing natural gas liquefaction facilities in Egypt. The LOI contemplates a contract term of 15 years and a total gross sales quantity of up to 2.5 trillion cubic feet (Tcf) of natural gas, or approximately 440 million cubic feet per day over the period.
Keith Elliott, Noble Energy's Senior Vice President, Eastern Mediterranean, commented, "This LOI with Union Fenosa Gas represents a major milestone for our Tamar asset and is indicative of the strong regional demand for natural gas. The associated expansion of the Tamar field facilities, subject to final investment decision of the Tamar partners, will not only enable substantial regional exports, but it will also increase the capacity for natural gas deliveries to Israel's domestic market. Building on the recent agreements with the Palestinian Power Generation Company, as well as the Arab Potash and Jordan Bromine Companies, this agreement continues to demonstrate our ability to accelerate value and strengthen economic growth for stakeholders across the Eastern Mediterranean region."
The price for the natural gas sold will be similar to the contract price in other natural gas sales and purchase agreements for regional export sales from Israel and is based mainly on a linkage to Brent oil prices. All parties are targeting to finalize a binding agreement within a period of six months, which will be subject to the receipt of regulatory approvals in Israel and Egypt.
Noble Energy operates Tamar with a 36 percent working interest. Other interest owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent, and Dor Gas Exploration with the remaining four percent. The Tamar field has an estimated 10 Tcf of discovered natural gas resources.
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