Gazprom in LNG purchase deal with Israel

A Gazprom subsidiary has signed a 20-year deal with Levant LNG Marketing Corp. for the exclusive purchase of liquefied natural gas from Israel‘s Tamar offshore gas field, Gazprom said on 26 February. Delek‘s subsidiaries said a heads of agreement deal was signed by Levant Marketing Corp. and Gazprom‘s trading arm for the sale of three million tonnes per year of LNG from the giant Tamar natural gas field in the Mediterranean Sea.

Delek said gas from Tamar would be developed using a floating LNG facility in a way that doesn‘t affect the supply of natural gas to the Israeli market.

Gazprom is the world‘s biggest gas producer and relies heavily on pipeline supplies to Europe, which make up around 80% of its revenues. The Russian gas monopoly wants to build up its LNG trading business to diversify away from traditional European customers receiving natural gas via pipelines.

“This is an important milestone for strengthening Gazprom’s position in the global LNG market,” RIA Novosti quoted Gazprom Marketing & Trading CEO Vitaly Vasiliev as saying. “We are confident that this deal will not only help strengthen and diversify Gazprom’s LNG portfolio, but also help GM&T build on our success in the Asia-Pacific region, where we have recently closed long and medium-term deals with numerous counterparties in India and North East Asia.”

Israel has two large offshore gas fields – Tamar and Leviathan – off the coast of the city of Haifa. The Tamar gas field’s reserves are estimated at 238 billion cubic metres and the potential of the Leviathan field is estimated at 453 billion cubic metres. Two of the main partners in Tamar, Texas-based Noble Energy and Israel‘s Delek Energy, are also part of the consortium developing Leviathan.

Some uncertainty remains though, because Tel Aviv has yet to officially say it will allow significant gas exports. A debate is going on at the moment whether gas discoveries should be used mostly to secure Israel’s domestic consumption in the future, Israel’s Eco Energy CEO Amit Mor told an energy conference in Athens on 25 February. He added that Israel’s energy switch in the economy over the last few years has been quite impressive.

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This article was originally published on NEWEUROPE Online.

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