Delek Group Ltd. (TASE: DLEKG) controlling shareholder Yitzhak Tshuva and his son, Elad, met a delegation of Chinese businessmen, fund managers, and government officials at a Herzliya restaurant last night. No Delek Group executives were present, suggesting that the meeting was arranged to initiate a private deal.
Tshuva visited China in early 2010, where he met senior government officials, including the governor of Heilongjiang Province, where a quarter of China's heavy industry is based. The visit by the Chinese delegation is a reciprocal visit.
The developing relationship with China is important for Tshuva and Delek Group, which wants to interest China in the company's offshore natural gas reserves in the Mediterranean, especially Leviathan. "Globes" reported yesterday that Tshuva has proposed to the Cypriot government to build an $8 billion liquefied natural gas (LNG) plant, and storage export facility on the island to deliver gas from Leviathan to China and other Far Eastern countries, such as Japan, Taiwan, and South Korea.
The Asian market has the greatest potential for LNG exports, because prices reach $12-15 per million BTU, compared with $5-8 per million BTU in Israel and $8-10 in Europe.
Noble Energy Inc. (NYSE: NBL) and Delek Group's Yam Tethys reservoir will run out within 18 months, and their Tamar reservoir will meet Israel's needs for 30 years. Tshuva has said that he will not make heavy investments to develop gas fields without gas supply contracts. He has already held talks with representatives from China, India, and other countries in order to tap into the huge Asian market.
Published by Globes [online], Israel business news - www.globes-online.com - on September 15, 2011
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