The Israel Electric Corporation (IEC) has admitted for the first time that it received a price proposal from British Gas lower than the one it received from Eastern Mediterranean Gas (EMG), in which Joseph (Yossi) Maiman and Egyptian concerns are partners.
The protocols of the IEC board meetings held in May this year, at which the gas supply deal offered by EMG was preferred to the one offered by British Gas, show that, in answer to a question from one of the directors, IEC president and CEO Jacob Razon said that a letter had been received from British Gas in 2000 in which it undertook to supply gas to the IEC more cheaply than EMG.
The letter was received after the tender-like process in which IEC published a request for proposals for gas procurement. In this process, the IEC decided that it would buy gas in the coming years from the Yam Thetis partnership, which had found natural gas off the coast at Ashkelon, and from EMG. Each contract was estimated to be worth some $2 billion.
British Gas also took part in the process, and, according to the IEC, offered a price at the time that was 40% higher.
In the past few months, while it was still in dispute with then Minister of National Infrastructures Joseph Paritzky over which gas supplier was preferable - Egypt or British Gas - the IEC again claimed that British Gas had offered a price 40% higher than that offered by EMG, and that therefore it would not conduct negotiations with British Gas.
Paritzky preferred the British Gas option for the sake of relations with the Palestinians (the British Gas proposal was for the supply of gas from fields off the coast at Gaza), and on the grounds that, in the end, the Egyptians would not supply the gas, since they had delayed the deal for many years. Prime Minister Ariel Sharon opposed Paritzky's stance, and preferred that the gas should be bought from Egypt.
The IEC said today that "at the time when the price proposals were submitted, the price offered by British Gas was the highest."
Published by Globes [online] - www.globes.co.il - on July 27, 2004