Israeli Tamar Partnership and the Spanish energy company Union Fenosa Gas (UFG) are holding talks on a possible pipeline gas supply deal reviving the 2014 memorandum of understanding that has since been halted over the Israeli domestic disputes regarding energy market regulatory issues, informed Natural Gas Europe.
The two companies are currently negotiating expanding the annual pipeline capacity from 4.5bm³ to 6bm³ to fulfill a 15-year contract.
As part of the deal with UFG-Tamar Partnership will have to implement Phase 2 of field development, including drilling and expansion of its offshore treatment rig capacity. A drilling rig, Atwood Advantage is expected to arrive at Tamar in November in order to drill another well which will improve energy security to the Israeli domestic market.
Furthermore, the gas is expected to be transferred to UFG’s liquefaction facility in Damietta, Egypt. In order to facilitate the deal, UFG is requested to drop its arbitration claim against Egypt from 2013.
Meanwhile, Tamar said that it would lay the pipeline up to the Israel-Egypt marine border line and from there the Spanish company will finance and take care of the infrastructure.
The total investment in Tamar expansion is estimated at $1.5-$2b which includes the 400km undersea pipeline from Ashkelon to Damietta, which would be mostly within Egyptian waters.
In related news, Israel is looking for new investors interested to research and explore its offshore waters in order to boost its reserves and gas output, as Bloomberg informed.