Zadik Bino-controlled Paz Oil Company Ltd. (TASE:PZOL) is expanding its private electricity generation activity. At the inaugural ceremony of the company's power plant at the Paz Ashdod Refinery yesterday, it announced plans for a second power plant, at an investment of $60 million.
The announcement will consolidate Paz's position as a major competitor in the private power market, alongside Yitzhak Tshuva-controlled Delek Group Ltd. (TASE: DLEKG), which built a power plant at the Ashkelon desalination plant, owned by VID Desalination Ltd., in which Delek is a partner. Delek Group, through Delek Infrastructures Ltd., is also a partner in two more power plants planned at textiles manufacturer Nilit Ltd. and at Alon Tavor.
Paz's second power plant will take two years to build. Its operation should boost Paz Ashdod Refinery's operating profit by $10 million a year. The power plant will also provide electricity for the 100-million cubic meter water desalination plant that Paz plans to build on the site of the refinery.
The power plant inaugurated yesterday is a 43-megawatt natural-gas driven cogeneration that generates. Paz Ashdod Refinery will use part of the electricity, and Paz will sell surplus electricity to the Kiryat Gat-based fab of NOR flash memory maker Numonyx Inc. and to Israel Electric Corporation (IEC) (TASE: ELEC.B22). Sales will amount to $15-20 million a year. The power plant cost NIS 160 million to build. Paz also inaugurated a biological sewage treatment plant.
Paz CEO Yona Fogel said, "Since we acquired the Ashdod refinery, we've invested NIS 700 million in its facilities."
Published by Globes [online], Israel business news - www.globes-online.com - on September 9, 2009
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