Israel's Delek Drilling and Avner Oil Exploration said on Sunday they have received a combined $250 million loan from HSBC for the development of the Tamar and Leviathan natural gas sites and other expenses. Delek and Avner, units of conglomerate Delek Group, are part of a group led by US-based Noble Energy developing natural gas wells off Israel's Mediterranean coast.
The Tamar prospect, which contains an estimated 8.4 trillion cubic feet of gas, is due online in 2013 with natural gas from Tamar expected to supply Israel's gas needs for more than 15 years. A nearby site, Leviathan, is nearly twice as large and due to be online around 2017.
The non-recourse loan to Delek and Avner will be in two parts, the companies said in a statement to the Tel Aviv Stock Exchange - a $75 million loan that will be available after meeting a number of conditions and a $175 million loan for the Tamar project and repayment of a bridge loan. The loans are variable interest and pay LIBOR plus 3.5-4 percent. Noble holds 36 percent of Tamar, while Delek and Avner own 15.625 percent each and Isramco Negev holds 28.75 percent.
The reliance on Israeli gas has intensified this year as supplies from Egypt have been erratic as militants have attacked the pipeline between Egypt and Israel 10 times.
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