Chevron, Partners Declare FID in Israel’s Tamar Expansion To Boost Gas Flows to Egypt
Boosting gas production from Israel’s Tamar offshore gas field, combined with gas from the neighboring Leviathan field, will further the ambitions of both Israel and Egypt in the Eastern Mediterranean.
Chevron and its partners have made a final investment decision (FID) to proceed with Phase One of the Tamar gas field expansion offshore Israel, a $673 million project which, together with production from the nearby Leviathan gas field, will aide Egypt’s quest to build a regional hub for liquefied natural gas (LNG) export and hydrogen production.
The working interest partners are Noble Energy, now Chevron Mediterranean Ltd. (25%), Mubadala Petroleum (22%), Isramco (28.75%), Tamar Petroleum (16.75%), Dor Gas (4%), and Everest (3.5%).
The expansion’s first phase envisions construction of a third, 150-km pipeline to the offshore Tamar platform from the Tamar field, facilitating delivery of up to 1.2 Bcf/D of natural gas by 2025, according to Chevron’s 8 December announcement which appeared in The Times of Israel and The Jerusalem Post.
Phase Two Will Boost Gas Transport to Egypt
Phase Two hinges on an expected gas sales agreement with Tamar’s existing customer in Egypt and transportation agreements via enhanced gas transport routes between Israel and Egypt. Completion of the second phase is expected in the second half of 2025 after receipt of required regulatory approvals, including an export permit from Israel’s Energy Ministry.
Completion of the Tamar expansion would boost total natural gas production from the field eventually to 1.6 Bcf/D, according to the announcement.
Jeff Ewing, managing director of Chevron’s Eastern Mediterranean Business Unit, noted the importance of Tamar to the Eastern Mediterranean region, saying that completion of the expansion “will enable us to meet Israel’s growing domestic demand, increase our natural gas delivery to neighboring countries, and supply the world” with lower-carbon energy.
The decision to declare a FID in Tamar’s Phase One expansion “reflects Chevron’s ongoing commitment to supporting the State of Israel’s strategy to develop its energy resources for the benefit of domestic and regional natural gas markets,” Ewing added.
Tamar delivered its first gas in 2019. In 2020, production ramped up, averaging 242 million net ft3/d (64 million ft3/d attributable to Chevron, which holds a 25% operator interest in Tamar).
In 2020, Tamar’s net daily production averaged 173 million ft3/d (51 million ft3/d attributed to Chevron). Progress continues in the Tamar southwest development, which consists of one well tied back to Tamar, according to Chevron. The lease for this field covers approximately 15,000 net acres (62 km2).
Chevron also holds a 39.66% operator interest in the nearby Leviathan gas field, Israel’s largest energy project, located 130 km offshore from Haifa.
Together, Leviathan and Tamar supply around 70% of Israel’s electricity, enabling a transition from coal to gas and moving Israel toward achieving energy independence and establishing itself as a supply hub within the broader region, most importantly as a gas supplier to Egypt’s LNG facilities and future hydrogen operations.
In June, Chevron signed a memorandum of understanding (MOU) with state-owned Egyptian Gas Holding Company (EGAS) to explore cooperation on the transport, import, liquefication, and export of natural gas from the east Mediterranean to Egypt, The Times of Israel reported.
Mubadala’s purchase in April 2021 of a 22% nonoperated stake in Tamar from Israel’s Delek Drilling was, at the time, hailed as the first, and largest, commercial agreement to follow the signing by Israel and the UAE of the Abraham Accords Peace Agreement in August 2020.
In May 2021, Delek Drilling transferred the assets it held as a limited partnership to NewMed Energy, a legal entity formed in the UK which has stated its intention to list on the London Stock Exchange (LSE). NewMed is currently seeking to merge with Capricorn Energy, another UK firm, as a prelude to the planned LSE listing.