Israel Electric signs $700m Leviathan gas deal

Leviathan Photo: Albatross

The Leviathan partners will sell 4 billion cubic meters of natural gas over two years.

Delek Drilling LP (TASE: DEDR.L) announced today that the Leviathan partners have signed a deal with the Israel Electric Corporation (IEC) (TASE: ELEC.B22) to sell 4 billion cubic meters of natural gas over two years. The deal is worth an estimated $700 million.

The announcement said that the supply of the natural gas will begin when gas starts flowing from the giant offshore Leviathan gas field in the final quarter of 2019 through to the first half of 2021.

During the period of the agreement, IEC will purchase natural gas from the Leviathan partners as required and above and beyond the gas supplies it receives from the Tamar partners. The purchase will be on the basis of available capacity from Leviathan without volumes of gas being reserved in advance.

IEC estimates that this new agreement will bring savings of $175 million over two years compared with purchasing other energy sources.

Delek Drilling CEO Yossi Abu said, "Wuth the signing of the natural gas sales agreement to the IEC, the natural gas production capacity at the Leviathan development in the first phase is almost completely accounted for. The range of natural gas sources from both the Tamar field and the Leviathan field will ensure the energy security of the State of Israel and allow the IEC to reduce electricity production from polluting coal and cut its energy costs and the entire profit will benefit Israel's citizens. With the signing of the agreement, the Leviathan field takes another step in its consolidation as a main energy anchor in the region, and we are working intensively to sign additional sales contracts."

Published by Globes, Israel business news - en.globes.co.il - on June 12, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Leviathan Photo: Albatross
Leviathan Photo: Albatross
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