Only small changes expected in gas roadmap

Tamar

Energy Minister Yuval Steinitz expects a cabinet vote on the plan during the next two weeks.

With the postponement of the vote on the gas roadmap, the Ministry of National Infrastructure, Energy and Water Resources said that the plan was final, and any changes in it would be unimportant. Sources inform "Globes," however, that Prime Minister Benjamin Netanyahu and Minister of National Infrastructure, Energy and Water Resources Yuval Steinitz are expected to insert several changes into the roadmap corresponding to the public comments made during the hearing. For example, the possibility of linking the gas price to one of the global averages, probably the average price index in Organization for Economic Cooperation and Development (OECD) countries, or reducing the price in the plan by $0.20-0.25 has already been discussed. Also under consideration is state encouragement for the development of the small and medium-sized reservoirs through either a state guarantee for the developers or partial or full state financing for a pipeline. Another possibility is making it absolutely clear that if gas companies Delek Group Ltd. (TASE: DLEKG) and Noble Energy do not sell the Karish and Tanin reservoirs within 14 months, regardless of the reason, the state trustee will be authorized to sell them at any price whatsoever, even NIS 1 or $1, for the purpose of generating some sort of competition and avoiding the current dependence on the gas monopoly. Steinitz is expected to meet with Delek Group and Noble Energy representatives today in order to brief them on the changes in the gas roadmap, and to reach agreement with them. Following the postponement in the vote, the oil and gas index dropped 1%, the Delek Drilling Limited Partnership (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L) shares were down 2%, and the Delek Group share also lost 2%.

Steinitz refused to comment on these developments, telling "Globes" only, "The comments and proposals raised during the hearings are being taken with the proper seriousness. I predict that the gas plan will be brought to the cabinet for a vote during the next two weeks."

After a few changes are made, the final version of the gas roadmap will probably be submitted to the ministers towards the end of next week, and it is intended to hold a discussion and vote on it the following Sunday. There is still no timetable for submitting the roadmap to the Knesset, but there is no plan to drag out the decision until after the Knesset recess. The Knesset may be summoned for a special session in August; otherwise, the roadmap will reach the Knesset on September 2, on which a special Knesset session on the state budget has already been scheduled.

It is not yet clear whether approval of the gas roadmap will be by the cabinet or the Knesset. Knesset approval is not legally required, but political sources believe that in order appease Minister of the Economy Aryeh Deri, the roadmap may nevertheless be brought to the Knesset for a vote.

Published by Globes [online], Israel business news - www.globes-online.com - on July 28, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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