Now Available: Israel Oil & Gas Report Q4 2013

Gas production from the Tamar field is expected to reach 27.6mcm/day (10.1bcm) by the end of the year making Israel self-sufficient in natural gas supplies for the first time ever. We expect stagnation in production growth through to 2015 as bottlenecks at the onshore receiving facility at Ashdod will limit production to 10.5bcm. This should be resolved by 2016, while we expect 2017 to be the first year the country exports natural gas, most likely from the Tamar FLNG facility. We see comparatively strong liquids upside with growing condensate volumes from Tamar and eventually Leviathan. Furthermore, near shore licences are showing greater likelihood of condensate and oil providing upside for the oil reserves outlook.

We highlight the following trends and developments in Israel's oil & gas sector:

Full Report Details at
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* The Tamar natural gas field entered production in March 2013 at approximately 8.4mn cubic metres/day (3bcm annually), with ramp-up over the summer to reach 27.6mn bcm/day (10.1bcm) by the end of the year. The gas produced will be delivered via the existing Mari-B pipeline to the onshore terminal at the city of Ashdod in southern Israel. Our 2013 gas production forecast for Israel is 7.6bcm, a conservative average to factor in decline volumes from Mari-B and the ramp up (though not full) from Tamar.
* Companies with an interest in Israel's offshore are awaiting a court ruling, expected on September 17, which could create the requirement for parliamentary approval for gas exports. This could mean caps will be put in place on the amount of gas that can be exported from the country. It is expected an export cap of 40% will be applied to newly discovered gas fields.
* We have revised our production forecast due to bottlenecks at the Ashdod receiving terminal. We anticipate natural gas output to reach 7.6bcm in 2013 then flatten at around the 10bcm mark until new receiving terminals are put in place by 2016. Stronger growth is projected from 2017, when the Leviathan field is expected to come onstream and exports from the Tamar FLNG facility could begin. We anticipate natural gas production to be over 20bcm a year from 2018.
* A final investment decision on the Tamar FLNG facility is due to be made before the end of 2013. We are anticipating Noble Energy's project to go ahead, particularly as Gazprom have signed a heads of agreement to purchase all LNG from 2017. If completed, a maximum of 4.1bcm of natural gas will be exported every year for 20 years from the Tamar field.

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