Delek to buy $100m. of Tamar gas for industry, transportation

The company is promoting the use of CNG and natural gas in general as an alternative to gasoline and diesel.

December 4, 2013 17:49
2 minute read.
Tamar natural gas rig.

Tamar natural gas rig 370. (photo credit: Albatross)


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Delek Israel Fuel Corp. has signed a $100 million deal to purchase gas from the Tamar reservoir for the next seven years to distribute within the industrial and transportation sectors.

The Delek Israel Fuel Corp. board members, in conjunction with the partners of the Tamar reservoir, approved the purchasing agreement Wednesday morning. They informed the Tel Aviv Stock Exchange that the gas would be available over the course of 2013.

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To make its way toward customers, the gas will be carried both by open distribution systems as well as through a compressed natural-gas (CNG) compression facility, which is currently in its licensing and construction phases at the Delek Pi-Glilot site in Ashdod.

“The Israeli government decided on reducing dependence on oil, and the transportation market is ready for the entry of gas,” Delek Israel Fuel Corp.

CEO Avi Ben Assayag said. “Gas fuel will lead to a revolution in Israel.”

Delek Israel Fuel Corp. is a subsidiary of the Delek Group and holds about 23 percent of Israel’s fuel-sector market.

The Tamar reservoir, which has been online and providing a source of electricity to the national grid since the spring, holds about 282 billion cubic meters of natural gas. At Tamar, Houston- based Noble Energy holds 36%, Delek Drilling and Avner Oil Exploration, which are both subsidiaries of the Delek Group, each own 15.625%, while Isramco owns 28.75% and Dor Gas owns 4%.

The neighboring and much larger Leviathan natural-gas field holding about 535 of gas and will only be online in a few years. A slightly different group of partners are the stakeholders in Leviathan, with Noble Energy owning 39.66%, Delek Drilling and Avner Oil Exploration each owning 22.67% and Ratio Oil Exploration holding 15%.

Delek Israel Fuel Corp.’s agreement is part of the company’s broader initiative to market natural gas to the industry and transportation sectors in Israel, the company said. The firm is already the leading supplier of natural gas both through distribution networks and through CNG, to plants that have not yet or never will receive hookups to the natural-gas pipelines, Delek said.

The company is promoting the use of CNG and natural gas in general as an alternative to gasoline and diesel in transportation. Natural gas allows for savings of up to 50% compared to the other fuels, in addition to significantly reducing pollution levels, Delek said.

In collaboration with the Energy, Water and National Infrastructures Ministry, Delek Israel Fuel Corp. is also in the process of building a CNG fueling station to be located in Tzifrin, the company said.

“We believe that as in many countries around the world, Israel will also transfer to using natural gas in industry and in transportation, mainly thanks to the cheap price compared to fuel and lower air pollution,” Assayag said. “We are committed to bringing the message of natural gas to every factory and area in Israel and providing the industrial factories with the opportunity to succeed in the face of international competition.”

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