The Shaniv Paper Industry Ltd has signed a $16 million agreement with the Tamar consortium for the supply of 60 million cubic meters of gas over seven years, the company said late Wednesday.
This is the first gas supply contract to be signed by the Tamar Consortium with a medium-sized industrial company. The company is located in Ofakim, southern Israel and will start receiving the gas from next month.
Israel's Energy and Water Ministry has been trying to encourage small and medium-sized companies to switch to using natural gas instead of LPG or fuel oil which are far more expensive. But so far, only the large industrial firms have signed contracts with the Tamar consortium -- which comprises Noble Energy, Delek Drilling, Avner Oil and Gas, Isramco and Alon Gas Exploration.
The larger companies estimate they will cut their energy costs by 30% by switching to gas.
Shaniv signed the contract directly with the consortium and not through any distribution companies, though the ministry has awarded licenses to them to serve the smaller and medium-sized industrial and commercial users.
Commercial gas production at the huge Tamar offshore field began on March 31. The consortium has now signed 12 supply contracts with local customers for the supply of 170 Bcm of gas over the next 15 years. The field has estimated resources of 284 Bcm.
