Noble Energy announces LOI with UFG

Noble Energy Inc. has 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 LNG 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 ft³ of natural gas (approximately 440 million ft³/d) over the period.

Keith Elliott, Noble Energy's Senior Vice President, Eastern Mediterranean, said: “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.”

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. The parties are targeting to finalise 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% working interest. Other interest owners include Isramco Negev 2 (28.75%), Delek Drilling (15.625%), Avner Oil Exploration (15.625%), and Dor Gas Exploration (4%).

The Tamar field has an estimated 10 trillion ft³ of discovered natural gas resources.

Adapted from press release by Callum O'Reilly

Read the article online at: https://www.lngindustry.com/liquefaction/06052014/noble_energy_announces_loi_with_ufg_535/