Tamar undercuts Leviathan in IEC gas deal

Tamar field Photo: Albatross

Tamar Partners Isramco and Tamar Petroleum are swelling gas to the Israel Electric Corp. at an estimated $4.40 per thermal unit.

Israel Electric Corporation (IEC) (TASE: ELEC.B22) has agreed a new deal with some of the Tamar gas field partners to buy gas for an estimated $4.40 per MMBtu (million British thermal units). The deal is with partners headed by Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L).

This latest deal allows IEC to buy gas at a price about 10% lower than the $4.80 per MMBtu (million British thermal units) that it agreed with the Leviathan partners and reopens competition between the two large gas reservoirs. The new agreement will also cut electricity bills by several percent.

The new deal has been signed despite opposition from Tamar partners Delek Drilling LP (TASE: DEDR.L) and Noble Energy. Tamar Partners Isramco and Tamar Petroleum complained to the Israel Competition Authority that Noble and Delek were blocking any Tamar deal to halt competition and promote the Leviathan field in which they have larger stakes (40% in Tamar and 85% in Leviathan). The Israel Competition Authority ruled that Isramco and Tamar Petroleum could agree separate deals with the IEC.

Published by Globes, Israel business news - en.globes.co.il - on October 4, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Tamar field Photo: Albatross
Tamar field Photo: Albatross
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