The partners in the Tamar natural gas field have signed another contract, this time with IPP Delek Sorek Ltd., controlled by Delek Group Ltd. (TASE: DLEKG). In a notice to the Tel Aviv Stock Exchange (TASE) this morning, Tamar's Israeli partners - Avner Oil and Gas LP (TASE: AVNR.L), Delek Drilling LP (TASE: DEDR.L), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Alon Natural Gas Exploration Ltd. (TASE: ALGS) - announced that they had committed to supply IPP with 3.3 billion cubic meters (BCM) of natural gas.
The gas supply contract will come into effect in the first quarter of 2016 and end after 15 years, or when the buyer consumes the entire contracted amount of gas, whichever comes first. The parties have the right to extend the gas supply agreement by two more years, if after 14 years from the start of commercial gas flow, the buyer has not consumed all the quantities set in the agreement.
IPP was given an option to reduce the minimum amount of gas delivered annually by 50% of the average gas flow in the three years preceding the exercise of the option, subject to adjustments set out in the agreement. With the reduction in the minimum annual amount of annual gas, the other quantities stated in the agreement will be reduced accordingly.
The partners in Tamar estimate that the cumulative revenue from the sale of natural gas to IPP could reach $750 million.