The Tamar partners last night reported that they have signed a non-binding letter of intent to sell liquefied gas to Russian giant Gazprom (RTS: GAZP; LSE: OGZD; DAX: GAZ) unit Gazprom Marketing and Trading Switzerland AG (GM&T).
Both sides agreed to conduct non-exclusive talks for the sale of natural gas from a floating liquefied natural gas buoy (FLNG) that will begin to produce 2-3 million MTPA of gas annually from 2017 over a period of 15-20 years. Under the agreement, the price of gas will be set according to the price of natural gas in Asia.
The Tamar partners had previously signed an agreement with Korea's Daewoo Shipbuilding & Marine Engineering Co. (KSX: 42660) to build LNG-floating production storage and offloading units.
The Tamar partners stressed that the agreement with Gazprom will not harm their ability to meet their commitments to provide natural gas to the Israeli market.