Yam Thetis completes temporary take-over of gas pipeline

Ministry of National Infrastructures: Baker Hughes Inc. of the US will replace Nederlandse Gasunie NV.

Ministry of National Infrastructures has decided that Baker Hughes Inc. of the US, which is responsible for producing the natural gas at Yam Thetis's concessions offshore from Ashkelon, will be temporarily responsible for operating the natural gas pipeline. Baker Hughes replaces Nederlandse Gasunie NV, which withdrew from the project two weeks ago, because the pipeline was built according to US, rather than the Dutch standards stipulated.

The decision surprised Israel's energy industry, since Yam Thetis is also a supplier of natural gas to Israel Electric Corporation (IEC), and is building and operating the first, undersea, section of the natural gas pipeline from offshore fields to the IEC receiving station in Ashdod.

The decision gives Yam Thetis temporary control of the entire natural gas pipeline, contradicting previous plans to prevent cross-ownership in the project.

Yam Thetis was only supposed to supply natural gas under its 11-year contract with IEC, worth $1.5 billion, and other energy consumers.

Over a year ago, the Ministry of National Infrastructures granted Yam Thetis an extraordinary permit to build the undersea section of the pipeline to the IEC receiving station. The decision contravened the Natural Gas Law, but received the necessary exemptions.

The Ministry of National Infrastructures claims that its decision conforms with the law and does not contradict the decision of the economic and social cabinet, because the temporary operating permit is for a short period only and the vital need to get the project going. It is not clear for how long the temporary permit will be valid.

The flow of natural gas cannot begin on schedule without a foreign company to operate the pipeline. The Ministry of National Infrastructures stated there was no choice but to choose Baker Hughes, which the ministry said, "Is a very professional company. It is not owned by Yam Thetis, but only carrying out the platform project as an external and professional company for all intents and purposes."

Published by Globes [online] - www.globes.co.il - on January 1, 2004

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018