IEC imports gas more cheaply than buying from Tamar

LNG  photo: Reuters

Israel Electric Corporation is buying three tankers ofLNG from BP at $4.9 per million BTU.

Israel Electric Corporation (IEC) is to import gas from overseas at a lower price per thermal unit than it pays in the domestic Israeli market. The company will buy three tankers of liquefied natural gas (LNG) from British company BP at $4.9 per million BTU (British thermal unit). IEC buys gas from the Tamar reservoir at $5.7 per million BTU.

Although the gas is imported, its price per million BTU is lower than that of gas from Tamar, including transport costs and the cost of converting the liquid gas.

The imported gas is brought to a ship moored ten kilometers west of Hadera where the conversion from liquid to gas is carried out. From there, the gas is pumped via a submarine pipeline to the Israeli coast. When there is no flow of gas from Tamar or when it is insufficient to meet demand for power in Israel, the ship can become operational within minutes, converting the liquefied gas to a gaseous state and pumping it to Israel.

Last summer, after record demand for electricity was reached in Israel, IEC bought a tanker of LNG containing 2.7-3 million mmBTU. In 2011-2012, the flow of natural gas from Egypt to Israel was cut off and the Yam Tethys reservoir became depleted. In the wake of this, a buoy system was set up offshore from Hadera, and the services of a gasification ship were hired from US company Excelerate Energy Inc.

Published by Globes [online], Israel business news - www.globes-online.com - on April 6, 2016

LNG  photo: Reuters
LNG photo: Reuters
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