Teva has an option to extend the three-year contract by two years.
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has signed a natural gas supply agreement with Delek Group Ltd. (TASE: DLEKG) unit Delek Natural Gas Ltd. for the supply of 15 million cubic meters of gas a year. Industry sources estimate the contract's value at $20 million. Teva has an option to extend the three-year contract by two years.
Teva will use the gas for its four plants in Ramat Hovav, Ashdod, Kfar Saba, and Netanya, which will convert to natural gas from the more expensive and polluting industrial oil and compressed gas over the next few years. The agreement will save Teva millions of dollars a year. The agreement reflects Teva's commitment to the environment and will improve the plants' profitability.
Teva's Teva-Tech plant in Ramat Hovav will be the company's first plant in Israel to switch to natural gas in the third quarter of 2014.
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2014
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