The stalled talks between the Israel Electric Corporation (IEC) (TASE: ELEC.B22) and Tamar partners Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG) and Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) are expected to restart in the coming days. The negotiations will be subject to the restrictions imposed by the Public Utilities Authority (Electricity), which brought about the suspension in the talks, sources believe.
The gas sale deal from Tamar to the IEC is expected to be Israel's biggest ever energy deal and will be worth more than $20 billion.
On the eve of the Shavuot holiday earlier this month, the Public Utilities Authority (Electricity) published a decision that it would not recognize as part of IEC's electricity tariffs, any attempt by Yitzhak Tshuva's Delek and his Tamar partners to raise the price of natural gas, by exploiting their position as the principle suppliers to the Israeli grid. Following the decision, the IEC told the Tamar partners that they were suspending negotiations before signing any deal in order to study the decision.
Last week, "Globes" revealed that the Tamar partners had agreed to substantially lower the price of natural gas in the huge deal being brokered with the IEC. When talks were suspended, the IEC was talking about $6 per million BTU, while the Tamat partners were asking $7.5 per million BTU. This is higher than the figure initially agreed 18 months ago but lower than the price the IEC pays the Tamar partners under a 2009 agreement but similar to the new higher price Jordan has agreed to pay for Egyptian gas.
Published by Globes, Israel business news - www.globes-online.com - on June 22, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011