Israel's Harel Insurance Investments and Financial Services (HARL.TA) said on Sunday it is in talks to buy up to 4 percent in the Tamar natural gas field from Texas-based Noble Energy (NBL.N).
Tamar was discovered in the eastern Mediterranean in 2009 with reserves of 10 trillion cubic feet. It began production in 2013 and is now Israel's primary gas supply.
A final agreement has yet to be reached, Harel said in a statement to the Tel Aviv Stock Exchange, and any deal would require regulatory approval.
Noble was not commenting, said a spokeswoman in Israel.
Noble and its Israeli partner Delek Group (DLEKG.TA) control a number of natural gas fields off Israel's coast. Under a deal reached with the Israeli government to boost competition in the sector, Noble agreed to trim its stake in Tamar to 25 percent from 36 percent.
Delek agreed to sell its entire 31.3 percent stake.
Harel said the negotiations with Noble are for a 3 percent share in the project with an option to buy another one percent.
Israeli media previously reported Noble was in talks with a few Israeli institutions regarding the sale of an 11 percent stake for at least $1 billion, including Harel, Clal Insurance (CLIS.TA) and Menora Mivtachim (MMHD.TA).
(Reporting by Ari Rabinovitch; Editing by Tova Cohen)
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