NewMed Energy LP (TASE: NWMD), which holds 45% of the Leviathan natural gas reservoir, has notified the Tel Aviv Stock Exchange of the cancellation of its $6.7 billion deal together with Ratio Energies LP (TASE: RATI), its partner in Leviathan, for the supply of gas to the new power plants of Dalia Energy Companies (TASE: DALIA). The plants in question are Dalia 2, an 850-megawatt gas-fired power station planned for construction at Tel Tzafit, and the Avshal power station on the site of the Eshkol power station in Ashdod, also with an 850-megawatt capacity. Eshkol was the largest former Israel Electric Corporation power plant to be privatized.
Dalia Energy was surprised by the announcement, and refuses to accept the cancellation. The question is whether the announcement amounts to aggressive negotiation tactics on the part of the Leviathan partners.
The official reason for the cancellation is failure to meet the preconditions for the deal. These are approval for finance, and approval by the Competition Authority. The deal is a long one, for the period 2030-2050. In 2041, the price will be reopened for negotiation with the possibility of a 10% change in either direction.
In exchange for this long-term commitment, NewMed is offering the attractive price of $4.7 per MMBtu. According to industry sources, although there was a fear that the Competition Authority would not consent to the deal, it would appear that its stance is fairly positive. No response has been forthcoming from the Competition Authority.
As far as finance is concerned, this does not appear to be problematic for Dalia Energy.
Dalia Energy stated in response to the NewMed’s announcement: "We were taken by surprise by the announcement by the sellers, and we completely reject it. The company has notified the sellers that the cancellation announcement has no validity, among other things because it was not made in accordance with the terms of the agreement. Discussions are currently taking place with the Competition Authority on an application for an exemption submitted by the sellers, and the Competition Authority has not yet declared its stance."
The deal is an important one for Israel’s power sector and for the local gs industry, and the assessment is that it will ultimately go ahead, although it is not yet clear on what terms.
Published by Globes, Israel business news - en.globes.co.il - on September 27, 2026.
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