East Mediterranean Gas Co. (EMG) has renewed talks for a detailed natural gas delivery contract with Hadera Paper Ltd. (AMEX: AIP; TASE: AIP). EMG has agreed in principle to allow Hadera Paper to purchase additional quantities of gas during peak hours, which improves the feasibility of the company's private power station.
This is the first progress in negotiations between EMG and a large private power producer since the Egyptian government announced that it planned to raise the price of natural gas exports to Israel four months ago.
As "Globes" earlier reported, EMG suspended talks on the detailed contract with Hadera Paper, which is a unit of Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) held through Clal Industries and Investments Ltd. (TASE: CII). Clal Industry executives subsequently met with Minister of National Infrastructures Benjamin Ben-Eliezer to seek his intervention in the matter.
In May 2007, EMG and Hadera Paper signed a term sheet for a 15-year natural gas contract worth $150-750 million. Hadera Paper also has a natural gas contract through 2011 with Yam Thetis. The contract with EMG is due to commence when the Yam Thetis contract expires.
Joseph Maiman is shareholder in EMG through Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) and his private company Merhav MNF Ltd. Merhav MNF declined to comment on the report.
Hadera Paper said last week that it was continuing negotiations with EMG.
Published by Globes [online], Israel business news - www.globes-online.com - on August 20, 2008
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