Sources inform ''Globes'' that Egypt’s East Mediterranean Gas Company (EMG) is about to sign a $1 billion natural gas deal with Israel Chemicals Ltd. (TASE: CHIM) subsidiary Dead Sea Works. The companies have been negotiating for a long time, and picked up the pace in anticipation of the start of deliveries in the first quarter of 2008. Joseph Maiman is a partner in EMG.
Energy market sources said that the differences between the parties are very narrow, and that a contract is on the verge of being signed.
Israel Chemicals will become Israel’s second largest natural gas consumer after Israel Electric Corporation (IEC). The EMG-Dead Sea Works contract will probably include an option to increase natural gas deliveries for other Israel Chemicals subsidiaries in the Negev, including Rotem Amfert Negev Ltd.
Israel Chemicals will probably consume 600-700 million cubic meters of natural gas a year, at a cost of $100-150 million. Dead Sea Works will need natural gas beginning late next year when the natural gas pipeline will reach the area.
Energy market sources said that EMG offered gas to Dead Sea Works at $3.50-3.80 per British Thermal Unit (BTU), lower than the price offered in previous contracts.
Published by Globes [online], Israel business news - www.globes.co.il - on May 24, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007