The Tamar gas field partners and Israel Corporation (TASE: ILCO) are very close to signing a natural gas supply contract. Sources believe that a $10 billion contract will be signed within days, as soon as some technical details are ironed out. The contract has been expected ever since the halt in gas deliveries from Egypt's East Mediterranean Gas Company (EMG), which had a contract with Israel Corp.
The contract will be worth several billion dollars. The Tamar partners - Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG), Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L), and Alon Natural Gas Exploration Ltd. (TASE: ALGS) - will supply Israel Corp. subsidiaries, independent power station OPC Rotem Ltd. and Israel Chemicals Ltd. (TASE: ICL) with 30 billion cubic meters (BCM) of gas worth $10 billion.
OPC's power station at Mishor Rotem will come on line in early 2013, and Israel Chemicals' power station at Dead Sea Works will come on line in 2014. Israel Corp. has the option of importing liquefied natural gas (LNG) through the floating LNG buoy at Hadera, which will begin operations by the end of this year, but the cost of LNG is triple the cost of gas from Tamar.
The Tamar partners have seven gas supply contracts: a $14-23 billion contract for the supply of 78-99 BCM of gas with Israel Electric Corporation (IEC) (TASE: ELEC.B22), signed in March; a $5 billion contract for the supply of 23.3 BCM of gas with independent power producer Dalia Power Energies Ltd., signed in January; a $1.2 billion contract for the supply of 5.6 BCM of gas with independent power producer Adeltech Ltd., signed in January; a $750 million contract for the supply of 3.3 BCM with Hadera Paper Ltd. (TASE: AIP; Pink Sheets: HAIPF), signed in January; a $680 million contract for the supply of 2.31 BCM of gas with Nesher Israel Cement Enterprises Ltd., signed in February; a $3-4 billion contract with independent power producer Dorad Energy Ltd., signed earlier this week; and now a $9-10 billion contract with Israel Corp.
Altogether, the contracts are worth $33-44 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on October 17, 2012
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