The $6.7 billion deal that the partners in the Leviathan offshore gas reservoir NewMed Energy LP and Ratio Energies LP signed with the new power stations of Dalia Energy Companies will go ahead after the Competition Authority removed its objections to it. The gas supply agreement, required for the construction of Dalia 2, an 850-megawatt gas-fired power station at Tel Tzafit, and for the Avshal plant on the site of the Eshkol power station in Ashdod, also with an 850-megawatt capacity, provides for the supply of gas at a fairly attractive price ($4.7 per MMBtu) for twenty years. Because of the delay in obtaining approval from the Competition Authority, NewMed announced the cancellation of the deal, but Dalia Energy refused to recognize the cancellation.
The Competition Authority originally expressed several fears. One concerned the duration of the deal and the lack of an exit clause. Instead, Dalia Energy will have the right to renegotiate the price in 2041, when it can change by 10% in either direction. If Dalia Energy is not content with the price, it can reduce the supply by 30% and obtain the rest from another gas reservoir. The gas will be supplied under a "take or pay" mechanism, meaning that the purchaser is committed to taking a set minimum quantity of gas, which is normal in the industry but which restricts the power stations. The Competition Authority approved both these clauses in full.
Another problem that arose was about sales to third parties, which Dalia Energy is permitted to make if it does not use all of the gas supplied to it at a given time. Under the terms of the deal, Dalia Energy can sell onwards up to 15% of the gas that it buys. The Competition Authority approved this clause, but reserved the right to intervene later should the need arise.
In the Competition Authority’s view, the agreement has very significant benefits for the economy. First of all, it sets a precedent for separate sales. Up to now, the partners in gas reservoirs would make joint sales that left very little room for competition. In this deal, the operator of the gas reservoir, Chevron (40%), is excluded from the agreement, while NewMed (45%) and Ratio (15%) have signed it separately. In addition, the price is considered attractive, and will keep the price of gas to the local economy low and prevent electricity prices from rising. One of the reasons that NewMed Energy entered into this agreement was its signed commitments to the Ministry of Energy and Infrastructure in exchange for a final permit to export gas to Egypt.
NewMed Energy’s cancellation of the deal may not have been recognized by Dalia Energy, which claimed that the conditions for cancellation had not been fulfilled, but the very threat put pressure on the Competition Authority, which, as mentioned, sees the deal as important for the economy. The Competition Authority wanted to carry out a more extensive, in-depth examination of the deal, but the parties to it were fearful of the time it would take and of the risk of the conditions that the Authority was liable to impose. NewMed’s move was aggressive, but it seems to have worked: within two weeks, which included the Sukkot holiday, the Competition Authority carried out all the work it needed to do on the deal, and in effect approved it in its entirety.
Published by Globes, Israel business news - en.globes.co.il - on October 6, 2026.
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