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Tamar partners say gas shutdown will not have major sales impact
September 24, 2017 / 7:04 AM / in 3 months

Tamar partners say gas shutdown will not have major sales impact

JERUSALEM, Sept 24 (Reuters) - A shutdown at Israel’s Tamar natural gas field caused by a cracked pipe is not expected to have a significant impact on quarterly revenue, and the problem will likely be resolved this week, the partners behind the project said on Sunday.

The stoppage, however, will take a toll on the country’s power stations, which have been forced to turn to more expensive fuels to generate electricity.

Production at Tamar, Israel’s sole commercial field, was halted on Thursday when a crack in an exhaust pipe was discovered during routine maintenance work by operator Noble Energy.

The partners in the project, which alongside Noble include Delek Drilling, Tamar Petroleum, Isramco Negev and Alon Natural Gas Exploration, say there are no safety or environmental risks.

The shutdown will lead to a loss in sales of about 0.1 billion cubic metres (bcm) of gas, or about $3.5 million in revenue after royalty and tax payments, the companies said in a statement to the Tel Aviv Stock Exchange.

“The failure is not expected to have a significant impact on the partnership’s revenue from gas sales in the third and fourth quarters,” they said.

Tamar in the first half of 2017 produced about 4.9 bcm of gas. It is responsible for the majority of Israel’s power generation and also exports to Jordan.

State-owned Israel Electric Corp, the country’s main utility, said power production remained stable, but it has been forced to use imported liquefied natural gas, diesel and fuel oil “which have a significantly higher cost” than the Tamar gas. (Reporting by Ari Rabinovitch; editing by Jason Neely)

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