Loss of Egyptian gas costs Israel NIS 10m a day

In July-August, the burning of an extra 142,000 tons of diesel, compared with 2010, cost NIS 600 million.

Israel Electric Corporation's (IEC) (TASE: ELEC.B22) use of diesel and fuel oil to generate electricity, instead of natural gas, cost the Israeli economy an average of NIS 10 million a day during the summer, according to the Ministry of National Infrastructures. In July-August, the extra burning of 142,000 tons of diesel, compared with 2010, cost NIS 600 million.

Deliveries of natural gas by Egypt's East Mediterranean Gas Company (EMG) was suspended due to attacks on gas pipelines and facilities in Sinai between February 5 and March 15, between April 27 and June 6, and since July 25. Subsequent attacks on the pipelines had no effect on the already suspended gas deliveries.

The Ministry of National Infrastructures says that IEC's consumption of diesel was 103% higher in January-August 2011 than in the corresponding months of 2010, mainly because of the suspensions of natural gas deliveries from Egypt. Diesel consumption was 382% higher in March than in the corresponding month, 212% higher in April, 424% higher in July, and 78% higher than in August.

Minister of National Infrastructures Uzi Landau says, "The figures highlight Israel's need to ensure energy independence. This is the primary objective we've set. Israel is an energy island, and, first and foremost, it must rely on itself. I reiterate my call to all the parties in the industry to put a shoulder to our effort in the various sectors to achieve this goal. The construction of a liquefied natural gas terminal buoy, expediting construction of the sea-land gas pipeline, and the rapid switch to the use of renewable fuels to generate electricity will create the energy security needed to develop the Israeli economy."

Diesel costs around NIS 125 per million British Thermal Units (BTU), compared with NIS 20 per million BTU for natural gas. Burning diesel instead of natural gas costs an extra NIS 4,250 per ton of diesel, as one ton of diesel is equivalent 40.5 million BTU.

Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018