BETHLEHEM (Ma’an) — Two Jordanian companies have entered into a major deal to import natural gas from Israel, according to Reuters news agency.

US-based company Noble Energy has reached an agreement with Jordanian Arab Potash Co Plc and Jordan Bromine to important natural gas from Israel for a period of 15 years beginning in 2016, the international news agency quoted Noble Energy as saying on Wednesday.

Noble Energy discovered the Tamar oil field in 2009, and along with the nearby Leviathan gas field it has the potential to turn Israel into a major regional energy power.

Noble will supply the Jordanian companies with about 66 billion cubic feet of natural gas, and expects total revenue from the deal to reach around $500 million.

The gas fields were originally the cause of international controversy, as they sit close to the Lebanese maritime border. The dispute has since been resolved. However, Lebanese officials still fear Israel might drill into its territory, which is located only a few kilometers away.

Jordan is said to be replacing its previous imports of Egyptian gas which are frequently interrupted by bombings in the volatile Sinai Peninsula.

Jordan and Israel have had political relations since a 1994 peace treaty that settled major bilateral issues but left the outstanding issues facing Palestinians unresolved.

Israel’s Tamar gas field sign $500 million gas supply deal with Jordan

Tamar partners sign 15-year deal with Jordanian companies; under agreement, Tamar to supply 66 billion cubic feet of natural gas.

Published: 02.19.14

The partners in the Tamar natural gas field off Israel’s Mediterranean coast have signed a deal to sell at least $500 million of gas over 15 years to two Jordanian companies in the first deal outside of Israel.

Under the agreement, Tamar will supply 66 billion cubic feet to Arab Potash and its unit, Jordan Bromine – a joint venture with US Albemarle – at their facilities near the Dead Sea, Noble Energy said on Wednesday.

Texas-based Noble owns 36 percent of the field. Israel’s Delek Group, through its units Avner Oil Exploration and Delek Drilling, holds a 31.25 percent share. Isramco Negev has a 28.75 percent stake, and Dor Gas Exploration holds 4 percent.

Jordan is hungry for gas amid numerous attacks on a pipeline in the Sinai peninsula that has halted supplies from Egypt.

Tamar, discovered in 2009, is estimated to hold more than 280 billion cubic metres of gas. It began production last March and has already signed a number of lucrative deals in Israel.

The field came on line months after Egypt halted gas supplies to Israel.

After a lengthy and heated debate, the government last year decided to allow 40 percent of its natural gas reserves for export. It is using gas as an opportunity to improve relations with its neighbours including Jordan. It is also thought Israel could ultimately sell gas to Turkey, although ties between the two countries have been frosty over the last few years.

The nearby and much larger Leviathan field last month signed a 20-year, $1.2 billion deal to supply gas to planned a Palestinian power plant once Leviathan starts production in 2016 or 2017. Leviathan is estimated to hold some 540 billion cubic metres of gas, enough to supply Europe for a year.

Tamar and Leviathan were the two of the largest gas finds in the past decade and overnight turned Israel into a gas exporter.

Tamar’s sales to Jordan are expected to start in 2016 once minimal required infrastructure has been completed.

The selling price will be based on a floor of at least $6.50 per one thousand cubic feet of gas with upside linked to the price of Brent crude oil. Noble said it would also charge a fee for marketing and sales services and for the transfer of gas to Jordan. Gross revenue is expected at $500 million with actual sales dependent on final purchased quantities and oil prices at the time of sale, Noble said.

“This deal will pave the way for additional export projects which could enhance regional cooperation as well as provide additional supply to the domestic market and enhanced security of supply through development of additional reservoirs and infrastructure,” said Lawson Freeman, Noble’s Eastern Mediterranean vice president.

Completion of the deal is subject to various closing conditions and regulatory approvals.

Noble said it was in a “number of additional negotiations to sell significant quantities of natural gas from both fields to multiple customers.”

Earlier this month, Australia’s Woodside Petroleum signed a deal to take a 25 percent in Leviathan for up to $2.55 billion.,7340,L-4490259,00.html


Potash company to import Israeli gas at preferential prices
by Mohammad Ghazal | Feb 19, 2014 | 23:28

AMMAN — The US-based Noble Energy will provide the Arab Potash Company (APC) with two billion cubic metres of natural gas at preferential prices under a $771 million agreement signed between the two sides on Wednesday.

Under the 15-year agreement, Noble Energy and its Israeli partners will provide the company with natural gas that will help reduce the company’s production costs, according to stakeholders.

APC Chairman Jamal Al Sarayrah said in a statement e-mailed to The Jordan Times that the cost-effective gas will “enhance APC’s competitiveness in the global market and its profitability, improve the prospects for future growth and expansion, and help protect the job security of the company’s employees who number more than 2,000”.

The APC’s statement did not make any mention of Israel. However, sources and reports said the deal entails extending a pipeline from the Israeli Tamar gas field to the south of the Dead Sea and extending it to the APC.

It will take two years to complete the required infrastructure after which natural gas supply is expected to start in 2016, according to the company.

A senior energy official told The Jordan Times that the Cabinet “gave APC the permission to import Israeli gas”.

In a statement on its website, the Israeli Delek Group announced that Delek Drilling Limited Partnership and Avner Oil Exploration signed a deal with Noble Energy to partner with the US company in exporting natural gas from the Tamar project in Israel to APC and its affiliate, the Jordan Bromine Company.

Partners in the Tamar field are Noble Energy, which holds 36 per cent of stake, Isramco Negev (28.75 per cent), Avner Oil Exploration (15.6 per cent), Delek Drilling (15.65 per cent) and Dor Gas Exploration (4 per cent).

Jordan relied for years on relatively cheap gas supplies from Egypt, but since the Arab Spring erupted in the Arab African country, the gas pipe that supplied Jordan and Israel has been subject to sabotage frequently, pushing Jordan to rely on the expensive fuel, leading to crippling the national economy.

The deal, Sarayrah said, will help APC restore its position as one of the lowest-cost producers of potash across the world.

“Up until 2008, APC was ranked among the lowest-cost producers of potash worldwide, giving it a powerful competitive edge in the global market…. our favourable cost structure and solid performance enabled us to contribute millions of dinars in taxes, royalties and fees to the national Treasury annually, and millions more to community development through our corporate social responsibility programmes,” he said.

However, due to the continued rise of tariffs and energy prices over the past few years, the company is at present among the world’s highest-cost potash producers, he said. “This contract represents meaningful action to help improve our competitive position,” he added.

Commenting on the deal, APC General Manager Brent Heimann said the shift from heavy fuel to the less expensive and more eco-friendly natural gas is projected to produce total cost savings of JD235 million, or average savings of JD11 per tonne of potash produced.

“This is essential to maintain our long-term operations and growth as Jordan’s largest private sector earner of hard currency, one of the largest contributors to the Treasury, and one of the largest private sector employers in the country, particularly as we cope with the drop in global potash prices,” said Heimann.

The company’s net profits fell to JD130.7 million in 2013 from JD198 million in 2012 because of a rise in cost of production due to an increase in fuel and energy costs as well as a drop in prices globally, the company said in a recent statement on Amman Stock Exchange website.

Heimann said: “APC conducted extensive studies which showed that the conversion to natural gas is the optimal energy solution, and after exploring realistic possible source of gas, the deal with Noble Energy emerged as the most reliable and cost-effective option available.”

He added that the agreement is strictly between the APC and Jordan Bromine Company on the one hand, and on the other NBL East Mediterranean Marketing Limited, which is owned by Noble Energy of Houston, Texas.

The agreement with APC is the second natural gas agreement in the region involving Noble Energy. In January 2014, the energy company signed an agreement with the Palestine Power Generating Company for the supply of natural gas.

Among the APC’s stakeholders are Potash Corporation of Saskatchewan, which owns 27.96 per cent, the Ministry of Finance (26.88 per cent) and the Arab Mining Company (19.92 per cent).



The deal will provide 1.8 billion cubic meters of gas to the companies Arab Potash and Jordan Bromine over 15 years beginning in 2016.
The Tamar natural gas reservoir’s developers signed a $500 million deal on Wednesday to provide gas to Jordanian companies.

It is the first export agreement from the basin 80 km. west of Haifa.

Representatives from Noble Energy signed the deal to provide 1.8 billion cubic meters of gas to Arab Potash and Jordan Bromine over 15 years beginning in 2016. The two companies will use the gas for their facilities near the Dead Sea, but the agreement will not affect the supply of gas to the domestic market, Noble Energy stressed. Representatives from each company participated in the signing on Wednesday in Amman, along with the US Deputy Assistant Secretary of State for Energy Diplomacy Amos Hochstein and US Ambassador to Jordan Stuart Jones.

Houston-based Noble Energy holds 36 percent of the 282 billion-cubic-meter Tamar basin, while Delek Drilling and Avner Oil Exploration – both subsidiaries of the Delek Group – each own 15.625%, Isramco owns 28.75% and Dor Gas owns 4%.

“Noble Energy is excited about this deal, the first export agreement from Tamar,” said Lawson Freeman, Noble Energy’s vice president for the eastern Mediterranean. “This deal will pave the way for additional export projects which could enhance regional cooperation, as well as provide additional supply to the domestic market and increased security of supply through development of additional reservoirs and infrastructure. I would like to express my gratitude to the United States State Department for their role in advancing this tremendous opportunity.”

Under the agreement, gas sales will be based on a starting price of at least $6.50 per thousand cubic feet of natural gas, linked to the Brent crude oil price index. Noble will also charge about $0.2 per thousand cubic feet for marketing and sales services for the transfer of gas to Jordan.

The completion of the sale is subject to customary compliance conditions, including regulatory approval.

As part of the agreement, until Tamar is producing at full capacity, the buyers will get limited quantities of gas from the reservoir during peak consumption months, due to the need to first supply gas to domestic customers in Israel, according to a report submitted to the Tel Aviv Stock Exchange by Isramco. The buyers have committed to pay for a minimum annual volume of gas, the report adds.