Tamar and Dalia Power sign $5b gas contract

Tamar is expected to sign additional contracts with refineries in Haifa and Ashdod, Hadera Paper and Nesher Cement.

Yesterday evening, the Tamar partnership signed another gas supply contract. Under a $5 billion contract with Dalia Power Energies Ltd., Tamar will supply 1.38 billion cubic meters (BCM) of gas for 17 years.

In the next few weeks, the Tamar partnership is expected to sign additional supply contracts with refineries in Haifa and Ashdod, as well as with Hadera Paper and Nesher Israel Cement Enterprises.

The Dalia Power station, which is located at Tzafit between Kiryat Gat and Beit Shemesh, will be the largest private power station in Israel, with 870-megawatt co-generation capability. The government approved station is a national project for the purpose of buffering electricity shortages in Israel.

Dalia Power chairman Arik Raichman said, "The agreement signed with the Tamar partnership is the last stage for Dalia Energy prior to the closing of a financial arrangement led by Bank Leumi (TASE: LUMI)."

Avner Oil and Gas LP (TASE: AVNR.L) CEO and Delek Group chairman Gideon Tadmor welcomed the signing of the agreement, and said, "We view this agreement as in important step towards the entry of private electricity producers into the electric industry. The widespread use of natural gas will continue to assist in bringing down electricity prices and reducing air pollution."

Delek Drilling LP (TASE: DEDR.L) CEO Yossi Abu added, "The natural gas revolution will reach every house in Israel. The Tamar partnership has agreed to a development plan with an aggressive timetable, and has committed to begin gas supply by mid-2013. They will continue to look out for the nation's interests along with the partners' interests in order to meet the needs of the Israeli community."

Noble Energy VP of Eastern Mediterranean Lawson Freeman also welcomed the agreement and said, "The current agreement is another step in the development of the Tamar reservoir, and a significant milestone in Noble Energy's history in Israel. The agreement strengthens the company's commitment to provide natural gas that is green and efficient, and to contribute to the economy and the environment in the upcoming decades."

Published by Globes [online], Israel business news - www.globes-online.com - on January 9, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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