Daewoo signs deal to develop Israel's Tamar gas field ~ Finance Update

Daewoo International

South Korea's Daewoo Shipbuilding & Marine Engineering Co Ltd said on Tuesday that it has agreed to develop Israel's Tamar natural gas field with Noble Energy Inc, Delek Group Ltd and Isramco Inc, and was eyeing vessel orders for the project.

Under the deal, Daewoo will soon conduct an LNG-FPSO feasibility study, aiming to sign a final agreement by the end of next year, a statement from the shipbuilder said, without specifying the size of its stake in the development deal or the value.

The statement said it aimed to produce liquefied natural gas (LNG) from the field, which has estimated reserves of 240 billion cubic meters of natural gas, from the end of 2016 if all the processes for the final deal remained on track.

The volume was equivalent to five times South Korea's annual consumption, Daewoo added.

"(Daewoo) hopes to win multiple orders for LNG floating production and storage and offloading (FPSO) vessels," the Daewoo statement said, adding that the field's owners were considering gas production in the largest offshore find of 2009 through FPSO vessels, not onshore plants, for geopolitical reasons.

The Tamar field is located in a sea area about 80 kilometres west of the port of Haifa, according to the Daewoo statement.

Isramco said last week that it had made a preliminary deal with Daewoo to build and operate a floating LNG facility for exports to South Korea and elsewhere, adding that the companies would hold talks to secure a contract for 15-20 years at a price likely to be between $7 and $9 per MMBTU.

South Korea, the world's second-largest LNG importer after Japan, imported nearly 30 million tonnes of LNG in the first ten months of this year.