Dalia Energies, Tamar sign NIS 5B gas deal
Company poised to become country's largest privately operated power station with overall power production of some 870 megawatt
The deal will open the door for private power producers and drive electricity prices down once the Tamar projects comes online in 2013. The gas for the Dalia agreement is scheduled to be online by 2014.
The agreement is for the supply of some 1.4 BCM per year – three times the original volume set in the agreement between the parties on December 2009.
Dalia Power Energies is a private company held by the United Kibbutz Movement's Inputs Association Agricultural Coop Society (43.3%); Hiram Epsilon (43.3%); Sigma Epsilon (3.3%); and the Israel Infrastructure Fund (10%). The company is headed by Eitan Meir.
Dalia Energies power station is located in the Tzafit area in Israel's southern lowland (known as the Hashfela region), and is expected to be the country's largest privately operated power station with an overall power production of some 870 megawatts.
The station will include two combined-cycle gas turbine production units each with a 435 megawatt power output.
The Tamar partnership includes Noble Energy, which is also the drilling contractor (36%); Isramco (28.75%) and Dor Gas (5%).
Bank Leumi will lead a bank and institutional investor consortium which will put up the lion's portion of the funding for the power station – approximately $800 million which constitute some 80% of the station's construction costs.
Recently, Dalia Energies examined a NIS 400 million (about $104 million) financing round in which it would offer cumulative preferred stock entitling the stock holders to dividends from past years as well as distributions for the current year.
Highest output
Dalia Energies Chairman Arik Raichman noted, "The agreement signed today with the Tamar partnership is the last step for Dalia Energies prior to the finalization of a financial arrangement led by Bank Leumi.
"This is the highest output en route to establishing the power station and we are happy for this opportunity to work with such highly esteemed companies such as Noble Energy and the Delek Group."
Gidon Tadmor, CEO of Avner and chairman of Delek Drilling chairman– both Delek subsidiaries, commended the agreement: "We see this agreement as an important step towards opening the electricity market to private production. The prevalence of natural gas will continue to contribute to lowering gas prices and reducing air pollution."
Delek Drilling CEO Yossi Abu commented, "The natural gas revolution will reach every household in Israel. The Tamar partnership which undertook the development of the project on an extremely tight deadline pledged to have the gas online for consumption by the second half of 2012.
"Tamar will continue to uphold not only the aims of the partnership but also the national interest therein with the aim of meeting the demand of the Israeli economy".
Noble Energy Senior Vice President Eastern Mediterranean Operations Lawson Freeman joined the congratulations, saying: "The current agreement is another step in the development of the Tamar field and an important milestone in the history of Noble's activity in Israel.
"The agreement consolidates the company's commitment to supply natural, green and efficient gas for the benefit of the economy and the environment in the upcoming decades."
Click here to read this report in Hebrew
