Israel Electric Corporation (IEC) today announced that Noble Energy Inc. (NYSE: NBL) had notified it that daily natural gas deliveries to the utility from Yam Tethys's Mari B will be reduced to 95,000 million British Thermal Units (mmBTU), a quarter of the contractual amount, and that further reductions are possible in future.
IEC said that a preliminary estimate of the cost of buying alternative, and more expensive fuels, to make up the shortfall in gas deliveries, was $250,000 a day.
In January, Noble Energy notified the Ministry of Energy and Water Resources that it would have to reduce output from the Mari B well.
Use of diesel instead of natural gas by IEC for the generation of electricity has sharply pushed up rates. IEC has stated that it will need an additional NIS 10 billion this year to finance diesel purchases, and demanded an immediate 30% rate hike for this purpose.
Noble Energy and Delek Group Ltd. (TASE: DLEKG) jointly own Yam Tethys.
Published by Globes, Israel business news - www.globes-online.com - on May 10, 2012
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