March 31 (Bloomberg) -- Israel started gas production at the Tamar offshore field in an effort to put the country on the road to energy independence and save a projected 1 billion shekels ($274 million) a month, according to the government.
The gas was expected to reach Israel’s port city of Ashdod by afternoon today, the Energy and Water Ministry said.
The field in the eastern Mediterranean Sea, estimated to hold 9 trillion cubic feet of natural gas, is being developed by a group that includes Noble Energy Inc., Delek Drilling-LP, Avner Oil Exploration LLP and Isramco Negev 2 LP. Along with Noble, Israeli energy exploration companies have discovered enough gas under the Mediterranean over the past three years to supply the country for 150 years.
“We are talking about billions of dollars coming to the state from tax revenues from Tamar gas over a 20-year period,” Gilad Alper, a senior analyst at Excellence Nessuah Brokerage Ltd. in Tel Aviv, said in a phone interview. “It will also reduce energy costs as we will replace expensive imports with a cheap domestic supply of natural gas. The start of the flow is a big positive for the economy.”
The Tamar and Dalit fields could supply Israel with gas for two decades. The larger Leviathan field is estimated to hold 18 trillion cubic feet of gas, Noble said in a statement March 6.
“This is an important day for the Israeli economy,” Prime Minister Benjamin Netanyahu said today in an e-mailed statement. “We are taking an important step toward energy independence.”
The three fields provide Israel with reserves more than 14 times larger than Germany’s total proven gas reserves, which the BP Statistical Review of World Energy published in June 2012 lists at 2.2 trillion cubic feet. Russia holds the biggest gas reserves, followed by Iran, according to BP Plc.
“This is the beginning of a new era,” said Isaac Tshuva, controlling shareholder of Delek Group Ltd., which owns stakes in Tamar via its Delek Drilling and Avner units. “The Israeli economy will be able to exploit the advantages of natural gas environmentally, geopolitically, socially and economically, and turn Israel into an important international player.”
Qatar, the Persian Gulf emirate with the world’s third-largest reserves of gas, said on March 10 it found a deposit with 2.5 trillion cubic feet of the fuel, its first discovery since locating the world’s biggest gas field 42 years ago. The North Field, shared with neighboring Iran, provides Qatar with 900 trillion cubic feet of reserves.
The flow from Tamar is expected to contribute about 1 percent to Israel’s gross domestic product, the Bank of Israel said in a March 24 report, forecasting that the economy will grow 3.8 percent in 2013, including the contribution from gas.
The Bank of Israel also said the flow from the Tamar field will improve the nation’s current-account balance by as much as $3 billion this year. For every $1 billion improvement in the balance, the exchange rate should appreciate about 1 percent, the bank has estimated.
In February, Russia’s OAO Gazprom, the world’s biggest natural gas producer, signed an agreement for the exclusive rights to export liquefied natural gas produced from the Tamar floating LNG plant. Noble Energy forecast Israeli demand for gas to grow at a compounded rate of 15 percent in 2012-2017. The Leviathan field is expected to supply the domestic markets in 2016, Noble said in December.