Levant LNG signs agreement with Gazprom subsidiary on negotiation of sales of LNG produced offshore Israel
Levant LNG, a subsidiary of Pangea LNG B.V., executed a Heads of Agreement (HOA) with Gazprom Marketing and Trading Switzerland AG (GM&T CH), a subsidiary of Russian gas major Gazprom, in which the parties agreed to negotiate in good faith a binding agreement for the sale of the LNG to be produced at the Floating LNG (FLNG) facility offshore Israel.
The HOA defines the terms for Levant LNG to sell 3 million tons per annum of LNG, being the estimated total output from the FLNG facility, to GM&T CH for a period of 20 years.
The sales and purchase agreement (SPA) will be for LNG sales based on feed gas provided by the Tamar Partnership, an upstream consortium including Noble Energy Mediterranean Ltd, Isramco Negev 2 Limited Partnership, Delek Drilling Limited Partnership, Avner Oil Exploration Limited Partnership, and DorGas Exploration Limited Partnership. These companies are the owners and producers involved in the discovery of significant natural gas resources in the Tamar and Dalit fields offshore Israel. (Earlier post.)
In November 2012, Levant LNG executed a Cost Sharing Agreement (CSA) with Tamar Partners to develop a FLNG export terminal off the coast of Israel.
The completion of the SPA would mark the first such from a FLNG project to a third-party independent buyer without involvement of a major IOC. The execution of the HOA is a major step underpinning the project’s financial feasibility, and will create the world’s first project-financed FLNG export facility.
Alongside the execution of the HOA, Levant LNG is launching the FEED for LNG production from the Tamar field, which will become Israel’s first LNG export facility.
Pangea LNG B.V. is a holding company with two major FLNG projects currently under development: the South Texas LNG Export Project on the Texas Gulf Coast, which recently earned US Department of Energy approval to export LNG to Free Trade Agreement (FTA) nations, and awaits approval to export to non-FTA countries; and the Tamar Project, 60 miles off the shore of Israel.
Pangea LNG is a developer of floating and land-based liquefaction projects which are designed to accelerate and support the monetization of gas reserves, particularly those that are stranded or have limited access to markets.