Israel Gas Company to Fund Pipeline
150-Year Supply of Gas
Israel’s state-owned Israel Natural Gas Lines Ltd. is seeking to raise funding for a $1 billion energy infrastructure project. To that end, it is mulling over foreign partnerships as well as bond sales.
Options include the sale of euro-denominated bonds and dollar notes, with a target of raising the funding by 2015. In a local private placement, the company has already sold debt yielding around 4.5 percent maturing in about ten years, Chairman Ron Chaimovski told Bloomberg.
Israeli energy companies and Noble Energy, Inc. (NYSE: NBL) of Houston, Texas are involved in exploration of the gas deposits in the Mediterranean Sea, where they say there is enough gas to fuel Israel for the next century and a half.
The Leviathan field is expected to commence production three years from now, while the Tamar and Dalit fields ought to begin production sometime this year.
“It’s not enough to find the gas,” said Chaimovski, who is in New York to meet investors. “We can’t afford to make mistakes. We’re a young company, and that’s why we are seeking partnership with people with the experience to help us.”
Israel Natural Gas Lines Ltd. has several other projects representing a total investment of around $15 million going ahead. Principally, the company is hoping to spend about two-thirds of that amount on an export terminal that would allow it to export the gas soon to come from these finds to the Middle East, Asia, and Europe.
And most importantly, later this year the company expects to begin work on a maritime grid located in the Mediterranean that would allow developers to lease space and use pipelines for gas transport.
With all the gas that is likely to come out of these major finds, a solid pipeline network is an essential investment for the future.