There is as yet no end in sight to the jet fuel crisis at Ben Gurion Airport, and the cumulative damage to airlines and the companies that refuel their planes is estimated at tens of millions of shekels. Fuel is supplied to airports directly by pipelines to fuel tanks, and from them to planes. No tankers are used in these operations.
Airlines are blaming Paz Oil Company Ltd. (TASE:PZOL), whose subsidiary Paz Aviation Assets Ltd. has the aviation fuel services contract. The airlines assert that Paz failed to invest enough in regular maintenance of the pipelines.
Paz says that the accusations are not worthy of response. In response to claims that it is basically a monopoly, the company says that the plane refueling pipeline system at Ben Gurion Airport is complicated and sensitive, and that its operations would be economically unviable if it were split between several companies.
Sources believe that the refueling of planes at Ben Gurion Airport can only resume when the identity of the contaminant found in the fuel filters becomes known, or after the cleaning of the refueling system is completed. However, material that Paz sent to a German laboratory has not yet been examined because the laboratory says that it only works for the US military.
The Ministry of National Infrastructures is trying to contact the laboratory, in the hope that it will respond to an official Israeli request.
Meanwhile, emptying of the jet fuel storage tanks and the cleaning of the pipelines at the airport began yesterday, but it is not known how many days this will take. It is possible that the source of the contaminant is not at Ben Gurion Airport at all, but further up the delivery chain, in which case the resumption of jet fuel flow could be delayed for many more days.
Until the flow of jet fuel is resumed, Paz and other fuel companies are using tankers to refuel jets at Ben Gurion Airport from Israel's emergency reserve in Ashdod. Over the weekend, Paz hired scores of tankers from other fuel companies to meet jet fuel demand at the airport. Five or six tankers are needed to fuel just one Boeing 747.
The limits of using tankers is forcing planes to depart with minimal fuel to reach the nearest airports at Larnaca in Cyprus or Amman in Jordan, where their tanks are filled to continue to their destinations.
The jet fuel incident began at noon on Thursday, when Paz Aviation Assets CEO Shmuel Gotshal notified Ben Gurion Airport general manager Shmuel Kandel that contaminants had been found in the jet fuel. The unknown contaminant was caught in the filters at the planes' refueling stations - the final stage of the jet fuel supply chain from Paz Ashdod Refinery and Oil Refineries Ltd. (TASE:ORL) in Haifa.
Israel Airports Authority sources cited Gotshal as saying that he was relying on an opinion by Dr. Yosefa Ben-Asher of the Israeli Institute of Energy and Environment that use of the contaminated fuel jeopardized lives.
Paz Aviation Assets is the sole supplier of jet fuel to Ben Gurion Airport, and is responsible for maintaining the jet fuel pipeline for the planes. The company supplies fuel to two companies that actually refuel planes: sister company Paz Aviation Services Ltd. and Mercury Aviation Israel Ltd. Following Gotshal's notice, Kandel suspended all takeoffs of planes that had been refueled at the airport, and ordered airlines to refuel their planes before landing in Israel, and to land with as much fuel as possible.
Yesterday, Paz Aviation Assets began cleaning its storage tanks at the airport and the pipelines from the fuel farm at Bilu Junction owned by government-owned Petroleum and Infrastructures Ltd..
Published by Globes [online], Israel business news - www.globes-online.com - on May 8, 2011
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