Israel Chemicals, OPC Energies and Oil Refineries Ltd. are negotiating an agreement with Energean, to buy 17 billion cubic meters of Israeli natural gas from the Greek company, according to Reuters. Israel Chemicals and Oil Refineries Ltd. are both owned by Idan Ofer.
The non-binding memorandums of understanding state that Energean, owner of the Israel’s Karish and Tanin gas reservoirs, will sell 0.6 BCM every year for 15 years. If the negotiations achieve a positive result, it will be the second contract between Energean and Israeli companies after a contract with Dalia and Or energies to supply 23 BCM over 20 years contingent on an agreement with the Or power plant.
Israel Chemicals and Oil Refineries Ltd, which are subsidiaries of Israel Corp, did not indicate yet how much they would pay for the deal if goes through.The amount of the deal is currently being negotiated, but according to Globes, there is talk that the price tag will be slightly higher than $4 per unit, which is less than the $4.70 per unit producers pay for Tamar reservoir gas.
Energean, a private exploration and production company operating in Greece, the Adriatic, the Mediterranean and North Africa, needs an additional deal, such as the proposed agreement with Israel Chemicals and Oil Refineries, for the supply of 3 BCM a year for reservoir development. Its present contracts, the company said in a press conference, are insufficient.
The agreement will focus on OPC Energy’s power stations and Mishor Rotem and a 148 megawatt power station currently being constructed in Hadera. OPC Energy, which is owned by IC, which is in turn owned by Kenon Holdings, also has an electricity production business in Latin America.
Last Month, Energean announced plans to develop the offshore Karish and Tanin fields and intends to spend $1.5 billion. These plans have yet to be approved by the Ministry of National Infrastructure and the Water Resources Petroleum Commissioner. Energean aims to close financing by the end of 2017 so it can begin supply by 2020.