Isramco Ltd will finalize and sign a loan package for $750 million for its part in the development of the Tamar offshore gas field, Isramco said on Monday. The company has a 28.75% stake in the field located off of Israel's northern Mediterranean coast.
The company said that the agreement was for a $350 million bridge loan and an agreement for an additional $400 million loan. The announcement comes as Isramco is in the midst of switching its CEO. Avi Gefen is taking over from long time CEO Yossi Levy who announced his resignation earlier this year. The total cost of developing the Tamar field is put at $3 billion.
The financing is seen as crucial for developing the field. Isramco is partners with Noble Energy, Delek Drilling, Avner Oil and Gas and Alon Gas Exploration in the Tamar consortium. The field is currently being developed and is due to begin commercial deliveries in early 2013.
The gas has gained added significance following the second cut off in as many months of gas supplies from Egypt. The field has estimated reserves of 248 billion cu m and could meet Israel's needs for at least 20 years.
Last week an explosion at a terminal in northern Sinai led to a halt in gas deliveries from Egypt. It is unclear when shipments will resume though last week one of the Israeli partners in East Mediterranean Gas Supply Company, Ampal-America Israel Corp., said it could begin within two weeks.
Israeli energy industry sources have expressed doubts, however, noting that in the last instance in early February it took nearly six weeks for supplies to resume and the latest explosion is far more serious.
In addition, there is growing opposition in Egypt to the sale of gas to Israel which has become a political hot potato since the ousting of President Hosni Mubarak and allegations that he profited from the sale of gas to Israel.
