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Chevron and partners to expand Tamar production

Chevron and its partners in Israel’s offshore Tamar gas field announced today the investment of $673 million in expanding gas production from the offshore field due to growing domestic and global demand. The move is seen as a strong hint to the new government that the gas export quota should be increased with the Tamar partners eager to sell more gas abroad and record bigger profits.

Leviathan partner NewMed Energy (TASE: NWMD) (formerly Delek Drilling) reported higher profits last week following increased exports to Jordan and Egypt.

The Tamar partners announcement today talks about a two-stage expansion of production. In the first stage a 150 kilometer pipeline will be laid from the Tamar rig, 90 kilometers offshore west of Haifa, to the coastal terminal. This will be the third pipeline between Tamar and the coast. The rig will undergo adjustments so that it can support supply of 1.2 billion cubic feet (BCF) of gas per day instead of the current 1.1 BCF. The first stage of production expansion will be completed in 2025.

At present annual production from Tamar total 10.2 billion cubic meters (BCM) of natural gas annually and after completion of the work in 2025 this will increase to 11.65 BCM in 2026. The Tamar offshore field initially contained 380 BCM and after ten years of operations 280 BCM remains.

The second stage of expansion will be linked to gas contracts from the Egyptian market and conveying the gas along an improved pipeline between Israel and Egypt.

Chevron’s announcement said that an investment decision for the second stage of the project will be made after weighing additional components, including regulatory approvals, and export approval from the Ministry of National Infrastructures, Energy and Water Resources. This is where the the new minister in the Netanyahu government, will have a decisive influence, and the policy that will be set.

Outgoing Minister of National Infrastructures, Energy and Water Resources Karine Elharrar rejected the Adiri Report recommending increased gas export quotas. There is an assumption that the new government will change this policy.

The Tamar Partners are Chevron Mediterranean Ltd. (25%), Isramco (28.75%), Mubadalah Investment UAE (22%), Tamar Petroleum (16.75%), Dor Gas Exploration (4%) and Everest (3.5%).

Published by Globes, Israel business news – en.globes.co.il – on December 8, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

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