Noble Energy is now waiting for the Israeli authorities to complete the authorization process related to the transportation of natural gas from Noble Energy's onshore facilities to IEC's power plant in Ashdod. The Ministry of National Infrastructures has indicated that authorization will be provided within the next one to two weeks. Pending authorization, Noble Energy has temporarily shut-in production and delayed sales of natural gas to IEC.
Noble Energy and its partners have an 11-year, take-or-pay contract to supply a total of 636 Bcf to IEC for use in IEC's electric power plants. Under the terms of the contract, the take-or-pay provision became effective January 1, 2004. The company and its partners expect the cash flow impact of the start-up delays related to the new natural gas infrastructure will be minimal.
IEC plans to startup one new gas turbine and four boilers converted to burn natural gas at its Ashdod electric power plant through the end of 2004. Noble Energy expects gross production to increase as the boilers are fired up, reaching 100 million cubic feet per day (MMcfpd), approximately 40 MMcfpd net to Noble Energy, late in the first quarter or early in the second quarter of 2004. Gross production is projected to increase during 2004 as IEC expands its gas-fired generation capacity. Ultimate gross production under the IEC contract is planned to reach 170 MMcfpd (70 MMcfpd net). Noble Energy anticipates it will market additional natural gas as Israel develops its infrastructure in the coming years.
Noble Energy made the Mari-B natural gas discovery in March 2000 with the Mari-B #1 well located approximately 15 miles offshore. Construction and installation of the Mari-B jacket and platform were completed in early 2003. Production facilities are sized to produce up to 600 MMcfpd.
The company estimates total recoverable reserves in the Mari-B field exceed one trillion cubic feet of natural gas. Noble Energy is the operator of the project with a 47.059 percent working interest. Noble Energy's partners include Avner Oil Exploration Limited Partnership (23 percent), Delek Drilling Limited Partnership (25.5 percent) and Delek Investments and Properties Ltd. (4.441 percent).
Noble Energy also has an undeveloped discovery, Noa, which is estimated to contain over 200 billion cubic feet (Bcf) of natural gas. Noa may be brought on line at a later date through a sub-sea tieback to the Mari-B platform.
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