Noa natural gas field. Image credit: Uri Kfir, CC BY-SA 3.0, via Wikimedia Commons
Israeli energy company Delek Drilling has signed an agreement to sell its 22 percent share in the offshore Tamar natural gas field to Abu Dhabi’s Mubdala Petroleum Company for $1.1 billion.
The deal represents the largest and most significant commercial agreement between Israel and the United Arab Emirates since the two countries established diplomatic relations as part of last summer’s Abraham Accords.
Mubdala Petroleum is an international natural gas production company with assets in 10 countries, with a focus on the Middle East. Founded in 2012, it is entirely owned by Mubdala Investments, owned by the UAE government in Abu Dhabi.
Delek was required to sell its rights to the Tamar field by the end of the year as part of a 2015 Israeli government plan to decentralise the natural gas market. Production at the Tamar field, about 90 km west of Haifa, began in 2013 and led to Israel’s era of energy independence.
The Israeli energy minister, Yuval Steinitz, welcomed the deal, stating that “this is the beginning of cooperation between the countries in the field of energy and in other economic and political areas”.
Tamar gas is delivered by pipeline to Ashdod, where it is converted into electricity for use in Israel, Egypt and Jordan.
The shift to gas since 2013 has replaced Israel’s former dependence on coal, and has played a major role in reducing Israel’s carbon emissions in the last decade.