Sources inform ''Globes'' that Exxon Mobil Corporation (NYSE: XOM) is holding preliminary talks to join in the project to import liquid natural gas (LNG) to Israel. The sources said that Exxon executives recently visited Israel in secret to examine whether to bid in the multi-billion dollar project.
Exxon may join one of the Israeli holding companies to bid in the tender. Energy sources said that the talks were with IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman and CEO Nochi Dankner, which has been considering the tender through subsidiary Clal Industries and Investments Ltd. (TASE: CII).
"Globes" recently reported that the government decided to expedite the procedures for publishing a tender for the import of LNG because of an expected shortfall in natural gas and the dependence on the natural gas pipeline from Egypt. An international tender is expected to be published in early 2009 for the construction of a LNG terminal and its operation for 20-30 years. The winner will commit to deliver four billion cubic meters of LNG a year, at an estimated value of $1 billion a year.
Exxon Mobil owns extensive natural gas reserves worldwide and is a 30% partner with the Qatar government in Ras Laffan Liquefied Natural Gas Company Ltd. (RasGas), which owns the country's gas fields. Sources believe that Exxon's participation in the LNG import project might facilitate permission to supply natural gas to Israel.
Entering the LNG market is a long-term strategic move for IDB, and is part of its plan to become a major player in Israel's energy and private electricity production markets.
Exxon Mobil, one of the world's largest energy companies, has a market cap of almost $500 billion, following the recent 20% surge in the price for oil, which has boosted the company's share.
Published by Globes [online], Israel business news - www.globes-online.com - on June 17, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008