The partners in Israel's Leviathan offshore gas field - NewMed Energy (TASE: NWMD) (45.34%), Chevron Mediterranean (39.6%), and Ratio Energies (TASE: RATI-L) have reported signing an agreement to supply Haifa Group with 0.75 BCM of gas over seven years. The deal is worth $150 million.
Haifa Group said that the natural gas from Leviathan will be used for its routine operational needs and as raw material for its ammonia production plant, which is currently under construction at Mishor Rotem in the Negev. The agreement will come into effect when construction of the ammonia plant is completed in 2025. This is the second agreement that Haifa Group has signed with the Leviathan partners. The first agreement was signed for five years and is currently being extended until the new agreement comes into effect.
The agreement with Haifa Group follows a long-term agreement recently signed by the Leviathan partners for the supply of natural gas to the Eshkol power plant, owned by Dalia Energy, Union Group and Meshek Energy. As part of the seven-year agreement, the Leviathan partners will supply Eshkol Energy Power Ltd. with 0.5 BCM of natural gas annually. The natural gas supplied by Leviathan is used by the two production units in a combined cycle at the Eshkol site. Supply commenced last June, with the transfer of the production units to the new owners.
Haifa Group CEO Motti Levin said, "Haifa Group is proud of the agreement signed with the Leviathan partners, which symbolizes a long-standing partnership and is a significant anchor in the group's development momentum with the investment of $700 million dollars in the Mishor Rotem plant, which promotes the company's principles of sustainability. At the center of the investment is the ammonia plant, which will use solar energy and natural gas as raw materials, and strengthens Israel's independence in ammonia production, reduces dependence on imports and contributes to food security."
Published by Globes, Israel business news - en.globes.co.il - on September 24, 2024.
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