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Pangea LNG and BW Offshore to partner in Israel Noble King FLNG

BW Offshore to take operation role in Tamar FLNG

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolOn February 19th, 2013, the Norwegian fleet operator BW Offshore (BW) announced to have signed a Memorandum Of Understanding (MOU) with the Dutch company Pangea LNG B.V. (Pangea) regarding Noble Energy (Noble) King floating liquefied natural gas (FLNG) project for the Tamar and Dalit gas fields offshore Israel.

Previously named Tamar FLNG, the project is now branded as King FLNG as it should gather and export the natural gas production remaining in the Tamar and Dalit gas fields from Israel own consumption.

Discovered in 2009 approximately 90 kilometers offshore Israel, the adjacent Tamar and Dalit natural gas fields revealed very quickly resources far above Israel domestic consumption.

From the actual estimations, Tamar holds 9.7 trillion cubic feet (tcf) and Dalit 1.4 tcf of natural gas recoverable reserves.

Only 2.5 tcf will be directed to Israel to cover its local needs.

Noble_King_FLNG_Project_MapThe 8.6 tcf of the remaining gas will be exported on the global market turning Israel from an historical net importer position to a net exporter.

Therefore Noble and its partners Isramco Negev (Isramco), Delek Group (Delek) and Dor Gas Exploration (Dor Gas), planned soon after the discovery to proceed by phases to develop the Tamar and Dalit fields.

The first production is scheduled to start on second quarter 2013 on the base of 1.0 billion cubic feet per day (cf/d) gas processing capacity.

In parallel to the production for the domestic market, Noble and its partners have been working on the scheme to export the remaining natural gas through a floating LNG solution.

In this project Noble and its partners share interests so that:

 – Noble 36% is the operator

 – Isramco Negev 28.75%

 – Delek Group 31.25% through

             – Delek Drilling 15.625%

             – Avner Oil Exploration 15.625%

 – Dor Gas Exploration 4%

In December 2012, Noble and its partners selected the Dutch company Pangea LNG B.V. to perform the front end engineering and design (FEED) of the Tamar FLNG project.

DSME and BW merge know-how in Noble King FLNG 

While based in The Netherlands, Pangea LNG has been established by:

 – Daewoo Shipbuilding and Marine Engineering (DSME)

 – D and H Solutions, a joint venture between Daewoo and the Norwegian Hemla.

 – Next Decade International

Then Pangea LNG created Levant LNG as a wholly-owned subsidiary to develop the King FLNG project.

Through Levant LNG, Pangea LNG signed a Cost Sharing Agreement (CSA) with Noble and its partners so that all the expenditures above $15 million should be supported by the contractor, Pangea LNG, in this case.

Noble_Pangea_LNG_BW-Offshore_King_FLNGThe purpose of this CSA is to transfer the maximum of risks on the contractor, in counter part of what this contractor is not exposed to competition for bid.

For both parties, this CSA is an efficient way to save time and costs in the whole project development in avoiding the tendering phase.

With DSME, Noble selected a partner having an experience in shipbuilding for LNG carriers, LNG regasification vessels and FLNG in consortium with Technip from France.

In this context, Pangea LNG and BW Offshore signed a separate agreement under the form of MOU to cooperate in the King FLNG project.

Based in Oslo, Norway, BW Offshore is the second world largest contractor of floating production units with:

 – 15 Floating Production Storage and Offloading (FPSO) vessels

 – 3 Floating Storage and Offloading (FSO) vessels

With 25 years of experience in building and running a fleet of oil and gas production vessels, BW Offshore is to provide Pangea LNG with its operations expertise in complex and large floating units such as King FLNG.

According to the contract signed between BW Offshore and Pangea LNG, BW Offshore will take the role of owner engineer under the development phase under the behalf of Pangea LNG.

In addition the discussions are still going on to give BW Offshore the potential ownership to operate the facility.

Considering Israel and Noble intention to develop the Tamar and Dalit natural gas fields on fast track, the consolidation of expertise from Daewoo Shipbuilding (DSME), through Pangea LNG, for the engineering and construction and from BW Offshore for the operations, gives to the King FLNG projects all the chances to come on stream in 2017 after completion of the FEED and final investment decision (FID) by the end of 2013.

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