Partners in the Noble Energy-operated Tamar gas field offshore Israel have amended the previously signed gas sales deal with its largest customer Israel Electric Corporation.
The part of the original deal that’s been amended is related to the exercising of the option to increase the gas quantities the IEC will require. The Tamar consortium has been delivering gas from Tamar to IEC since 2013, under a 15-year sales deal, for the delivery of a maximum of 87 bcm of gas in total.
The original agreement stipulated that the first option period and the increase in the quantity of gas that would be supplied to the IEC would start in January 2017, and last until the end of 2019. This has now been amended to run until the end of 2018.
Furthermore, the start of the second option period and the increase of the quantity of gas to be supplied to IEC has been moved to January 2019, instead of early 2020, as stated in the original agreement. The second option period will run until the end of the original agreement’s period.
Under the amended terms, the minimum amount to charge (Take or Pay) will be 3 billion cubic meters for the year starting January 1, 2019, until the end of the agreement period. The contractual amount to supply (for the entire agreement period) will remain unchanged at 87 bcm.
Delek Group, a partner in the Tamar field said the amendment to the agreement has been signed inter alias due to concerns about utilization of the capacity of the gas pipeline from the Tamar project to the Israeli market in 2019,with the objective of freeing up capacity of the pipeline and to facilitate additional quantities of natural gas from the Tamar project for other consumers in the market.
The anti-trust authority has confirmed that the said amendment to the option dates in the agreement is acceptable. The amendment to the agreement is subject to receipt of the approval of the bodies financing the Tamar partners, Delek said.
Delek said that it estimates in the light of the Tamar Project’s existing agreements, and based on the partnership’s estimates of forecast demand for the supply of natural gas from the Tamar project, that signature of the amendment will not have a material impact on the Tamar project’s forecast discounted cash flow.