Chevron partners greenlight $24m investment to boost gas production at offshore site

Energy firms approve second phase of project to expand natural gas production from Tamar field, after securing a new sales agreement for exports to Egypt

Sharon Wrobel is a tech reporter for The Times of Israel.

Tamar natural gas field off the coast of Israel. (Courtesy)
Tamar natural gas field off the coast of Israel. (Courtesy)

US energy giant Chevron and its partners in the Tamar reservoir off the country’s Mediterranean coast on Sunday announced a decision to invest $24 million to bolster natural gas production capacity from the offshore field.

The investment is part of a two-phase plan aimed at expanding natural gas production capacity to about 1.6 billion cubic feet (BCF) a day from the Tamar field, located west of Ashkelon, to meet Israel’s energy needs and to export gas to Egypt.

The Tamar partners okayed a so-called final investment decision (FID) needed to proceed with the second phase of the gas production expansion project.

“Reaching FID for Phase Two of Tamar’s expansion reflects Chevron’s ongoing commitment to partnering with the State of Israel to continue development of its energy resources for the benefit of domestic and regional natural gas markets,” said Jeff Ewing, managing director of Chevron’s Eastern Mediterranean Business Unit.

In the first phase of the project, a 150-kilometer pipeline will be laid from the Tamar field to the platform. The adjustments are expected to support the daily supply of production of 1.2 BCF of natural gas, up from the current 1.1 BCF. Work on both phases is scheduled for completion in 2025 at a total investment of $673 million.

Chevron operates and holds a 25% stake in the Tamar gas field. The partners in the Israeli gas reservoir include Isramco, which holds 28.75% of the rights in Tamar; Abu Dhabi’s Mubadala Energy, which holds 11%; Tamar Investment 2, which has an 11% share; Tamar Petroleum, which has a 16.75% share; Dor Gas with 4%; and Everest with 3.5%.

Workers on the Israeli ‘Tamar’ gas processing rig, 24 km off the Israeli southern coast of Ashkelon. (Moshe Shai/FLASH90)

The investment approval comes after the partners in the gas field announced on Friday that they had secured a new gas sales agreement with Blue Ocean Energy,  Tamar’s Egyptian importer of Israeli gas.

Under the terms of the agreement, the Tamar partners will sell an additional 4 billion cubic meters (BCM) of natural gas per year to Egypt for a period of 11 years, or about 43 BCM. As of today, the Tamar reservoir exports to Egypt about 2 BCM per year. The supply of gas exports will commence on July 1, 2025 according to the agreement.

Israel gave approval in 2023 for the expansion of natural gas exports to Egypt from Tamar.

About one-third of the additional natural gas produced from the Tamar rig will be allocated to the domestic market to meet its energy needs.

Overall, natural gas production from the field will increase by 60% from 2026, or 6 BCM annually.

The Tamar platform located off the coast of Ashkelon was shut down for a five-week period in the aftermath of the onslaught by the Hamas terror group on October 7, and as heavy rocket fire from the Gaza Strip continued to batter the south and center of the country. Drilling at the offshore gas field resumed in mid-November. Israel’s Leviathan natural gas platform, the nation’s largest, located off the coast of Haifa in the north, remained in operation throughout the war.

Israel’s natural gas operations have in recent years put the country on a path to energy independence — and have shielded it from the worst of the energy crisis sparked by the Russian war on Ukraine — in a region with few natural resources.

Rockets are launched by Palestinian terrorists from the Gaza Strip toward Israel, in Gaza, October 7, 2023. (AP Photo/ Hatem Moussa)

The Leviathan gas field started pumping on December 31, 2019, and natural gas started to flow in 2013 at the nearby Tamar, which holds some 10 trillion cubic feet (TCF) of natural gas, half of the amount held in Leviathan.

In June 2022, Israel, Egypt and the European Union signed a memorandum of understanding that will see Israel export its natural gas to the bloc for the first time. According to the agreement, Israeli gas will be supplied via Egypt’s liquefied natural gas (LNG) plants to the EU.

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