JERUSALEM: Delek Drilling said on Monday it had signed a non-binding deal to sell its stake in the east Mediterranean natural gas field Tamar to Abu Dhabi’s Mubadala Petroleum for $1.1 billion.

The deal, if finalized, would be one of the most significant developments since Israel and the United Arab Emirates agreed to normalize ties last year.

The Tamar gas field is one of Israel’s primary energy sources and is able to produce 11 billion cubic meters of gas each year.

That is enough to cover much of the Israeli market as well as exports to Egypt and Jordan. Delek holds a 22% stake in the field, which is operated by Chevron.

Delek, which also holds a major stake in the even larger Leviathan gas field nearby, is selling its Tamar stake to comply with government moves to open the market to more competition.

Delek said the aim was to try to complete the deal, which would require approval by Israel’s Energy Ministry, by the end of May.

Reuters