Analysts are enthusiastic about today's gas delivery contract signed between the Tamar offshore natural gas prospect partners and Israel Electric Corporation (IEC) (TASE: ELEC.B22). The deal comes less than a year after the partnership announced the discovery of the prospect's large gas reserves.
The Tamar partnership signed a 15-year contract for the sale of at least 2.7 billion cubic meters of natural gas a year to IEC. The contract is worth about $10 billion.
"This time, we're talking about a very big and important step for the energy companies," says Clal Finance analyst Yuval Ben-Zeev. He says that this is the "anchor deal", and notes that the market had been waiting for it for a long time, because it will allow completion of the financing and development of the reserve. "The quantities could be greater, and we believe that they will be greater, because the current quantity is a direct continuation of IEC's current purchase from Yam Tethys, and does not reflect future growth in IEC's energy needs. Furthermore, this is a 15-year contract, and what do you think will happen next? Here's a hint: they'll buy more!"
Delek Group and Noble Energy jointly own Yam Tethys, which sell gas from the reserve offshore from Ashkelon. The firms also collaborate on the drilling in the Tamar prospect.
Published by Globes [online], Israel business news - www.globes-online.com - on December 27, 2009
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