Shaniv Paper signs $16m gas deal with Tamar

The Ofakim plant is the first mid-sized manufacturer to sign a gas deal, opening the way for more contracts.

Shaniv Paper Industry Ltd. (TASE: SHAN) in Ofakim has signed a natural gas purchasing agreement with the Tamar partners. This is the first contract by a mid-sized manufacturer, opening the way for other companies in the periphery to convert their plants to natural gas.

Shaniv CEO Pesach Bernat, who led the struggle to connect Ofakim's industrial zone to the natural gas pipeline, said that the hook-up saved 130 jobs at the company. Shaniv has been struggling in recent years to compete against other enterprises, such as Hadera Paper Ltd. (TASE: AIP; Pink Sheets: HAIPF), which have been using natural gas for years. Gas cuts factories' production costs by up to 30%.

Shaniv signed a contract directly with Tamar operator Noble Energy Inc. (NYSE: NBL), even though small and mid-sized manufacturers are supposed to buy gas through middlemen. Noble Energy has promised to supply 60,000 cubic meters of gas over seven years, or until supplies run out. The contract is reportedly worth $13-16 million. Unusually, the price of gas is linked to industrial fuel rather than electricity rates, which is the norm for Tamar's contracts.

Published by Globes [online], Israel business news - - on April 10, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018