The joint tenders committee of Israel’s National Infrastructure and Finance Ministries has issued an international prequalifiying tender for an offshore liquefied-natural-gas receiving terminal. The build-own-transfer tender is one of the largest issued in recent years by the by the State of Israel. The target date set for the operation of the terminal is October 2013. The decision to proceed with the terminal is part of the government’s policy to guarantee natural gas supplies to the local economy which has been rapidly switching to gas in recent years.

“The tender is for the construction, operation and maintenance of the LNG terminal and a connection to Israel’s main transmission network,” says Shuki Oren, Finance Ministry accountant general, who has overall responsibility for the tender process. He added that the project includes storage and a regasification plant.

The offshore receiving terminal, estimated to cost about $400 million, will have a capacity of at least 4 billion cu meters per year. Israel’s demand for natural gas is expected to reach 10 to 12 BCM in 2015. A site has yet to be determined, but a National Infrastructure Ministry spokesman said that several sites are under consideration off Israel’s Mediterranean coast and a final decision will be made before issuing the final request for proposals in March 2010. The tenders committee is expected to decide on the winning bidder in late 2010.

The tender specifies that the winning bidder will be responsible for linking the facility to Israel’s main transmission network, which is partially completed. The entire network linking all major powerplants (except four coal powerplants) is due to be completed by the end of 2010. A National Infrastructure Ministry official said that local customers would be responsible for reaching agreements on future supplies of LNG with suppliers.

Israel now is buying natural gas from the American Israeli Yam Thetis consortium, which operates the Mary field off Israel’s southern Mediterranean coast. But that field is due to run out in 2012. In addition, East Mediterranean Gas Supply Co., Cairo, began delivering gas from Egypt via a marine pipeline in May 2008.

In March Israel’s Natural Gas Authority recommended to the National Infrastructure Ministry that the proposed LNG project be reassessed in light of the discovery of large quantities of natural gas off Israel’s northern Mediterranean coast. However the new Israeli government decided to proceed with the LNG terminal tender as part of the strategy to diversify sources of supply. Ministry officials stressed that the Mediterranean gas discoveries will serve as a safety net for the Israeli economy in the years to come, but that additional suppliers will still be needed.