Chevron, a prominent player in the energy sector, has joined forces with its partners in the Tamar reservoir situated off Israel's Mediterranean coast, announcing a substantial investment of $24 million to bolster the production of natural gas from the offshore field.

This financial commitment forms an integral part of a meticulously crafted two-phase strategy aimed at significantly enhancing the natural gas production capacity of the Tamar field to approximately 1.6 billion cubic feet/day. Located west of Ashkelon, this initiative is strategically designed to meet the burgeoning energy demands within Israel while concurrently facilitating the export of gas to Egypt.

The consortium of partners involved in the Tamar project has given the green light to what is referred to as a final investment decision (FID), marking a pivotal milestone to progress into the second phase of the gas production enhancement endeavor. In the initial phase, slated for completion by 2025, a 150-kilometer pipeline will be laid from the Tamar field to the platform, with projections indicating an increase in daily gas production to 1.2 BCF, up from the current 1.1 BCF. The total investment required for both phases of the project is estimated at a substantial $673 million.

This decision to invest further follows a recent announcement made by the consortium, unveiling a freshly secured gas sales agreement with Blue Ocean Energy, the Egyptian importer of Israeli gas. According to the terms of this agreement, the Tamar partners are set to ramp up gas exports to Egypt by an additional 4 billion cubic meters (BCM) annually over an 11-year period, commencing from July 1, 2025. Presently, the Tamar reservoir exports approximately 2 BCM per year to Egypt.

In addition to fulfilling its export obligations, a notable portion of the augmented gas production will be directed towards the domestic market to address Israel's pressing energy needs. Consequently, the overall natural gas production from the Tamar field is forecasted to witness a substantial surge of 60% by the year 2026, translating to an additional 6 BCM annually.

This strategic maneuver is in perfect alignment with Israel's broader aspirations in the energy sector, as demonstrated by the memorandum of understanding inked in June 2022 among Israel, Egypt, and the European Union. This landmark agreement sets the stage for Israel to export its natural gas to the EU via Egypt's liquefied natural gas (LNG) facilities, marking a significant stride forward in regional energy cooperation and integration.