London — The partners in the Tamar gas field offshore Israel have reached a preliminary agreement over the marketing of gas production from the asset following a disagreement in 2020 over sales arrangements.
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Israeli gas producer Delek Drilling said Jan. 31 in a statement that all of the Tamar partners had signed a non-binding memorandum of understanding intended to enable "each one of the partners to separately market its proportionate share of gas produced from the field."
The MOU also provides that there would remain the possibility to jointly market the gas produced from Tamar, which has been the case since the field started up in 2013.
"The Tamar partners shall hold negotiations in order to reach a detailed and binding agreement based on the MOU by Feb. 17, 2021," Delek said.
The dispute began last year when some Tamar shareholders alleged that operator Noble Energy -- which has since been acquired by US major Chevron -- and Delek were dragging their feet on amending a sales agreement with state-owned utility Israel Electric Corp. (IEC) for gas from Tamar because it would be against the larger interests that they have in the Leviathan field.
In September, Israel's Competition Authority ruled that Noble and Delek did not have the right to veto marketing decisions made by the other shareholders in Tamar.
That decision led the other Tamar shareholders to agree in October an addendum to the supply deal with IEC for the sale of gas above the take-or-pay volume and at a lower price than in the original agreement.
Chevron holds a 25% stake in Tamar, with Delek Drilling holding 22%.
The other Tamar shareholders, those that agreed the new deal with IEC, are: Isramco Negev 2 (28.75%); Tamar Petroleum (16.75%); Dor Gas Exploration (4%); and Everest Infrastructures (3.5%).
At Leviathan, which started up at the end of 2019, Chevron holds 39.66% and Delek Drilling 45.34%. The other shareholder is Ratio Oil Exploration with 15%.
Under the MOU, any partner at Tamar can also market gas over and above its proportionate share, subject to the availability of production capacity on a daily basis and provided that another partner has not marketed its share in the gas on the same day.
In such a case, Delek said, balancing arrangements would apply in order to balance the partners' rights relative to the gas sold according to the partners' proportionate share in the field.
The MOU has been submitted to Israel's Competition Authority for approval, Delek said.
An agreement was also reached on the the October addendum to the Tamar sales agreement. It said that IEC would be able to buy 1.25 Bcm from Tamar for a price lower than the original IEC-Tamar agreement.
Some 0.81 Bcm of that volume was already supplied in 2020, Delek said.
At the same time, a settlement agreement was agreed with IEC on supplies from Leviathan.