OAO Gazprom (GAZP), the world’s biggest natural gas producer, is seeking exclusive rights to export liquefied natural gas produced from fields off Israel’s Mediterranean coast.
Gazprom Marketing & Trading signed a heads of agreement with Levant LNG Marketing Corp., outlining the terms of a 20- year sales deal from the Tamar floating LNG plant, the unit said today in an e-mailed statement.
Levant and Gazprom’s marketing unit will hold exclusive talks on LNG sales for six months, according to a separate statement to the Tel Aviv bourse today. Sales may amount to 3 million tons of LNG a year, linked to Brent crude prices, according to the statement. That equals the plant’s total planned output volume.
Gazprom, Russia’s gas export monopoly, is seeking to expand LNG sales as growing Asian demand boosts global trade of the chilled gas, shipped by tanker. The Moscow-based company’s overseas sales are limited mostly to gas sent by pipeline to Europe, where demand is stagnant and competition from other suppliers is strengthening.
A series of offshore discoveries has created an opportunity for Israel to become a gas exporter. The Tamar and Dalit fields, which will supply the Tamar floating LNG project, are big enough to supply the country with gas for two decades. The larger Leviathan field holds more than the U.K.’s remaining reserves.
“The execution of the HOA is a major step underpinning the project’s financial feasibility,” Levant said in a statement.
A final investment decision for the LNG plant is expected by the end of 2013, it said. The plant will be completed in 2017, according to Gazprom.
The Tamar and Dalit gas fields in the eastern Mediterranean Sea are being developed by a group comprising Noble Energy (NBL:US) Mediterranean, Delek Drilling (DEDRL), Avner Oil (AVNRL) Exploration, Isramco Negev-2 and Dor Gas.
Levant LNG was formed by Daewoo Shipbuilding (042660) & Marine Engineering Co., D&H Solutions and Next Decade LLC.
Today’s agreement follows the Gazprom marketing unit’s letter of intention signed in March 2012 to buy the LNG from the Tamar project.
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