Gov’t, Phoenicia Glass sign natural gas hookup agreement
10/16/2012 23:15
Agreement will provide natural gas connection to factory, which has been in danger of closing due to its financial state
Drillling for gas offshore Photo: Courtesy
Officials from the Energy and Water Ministry and Israel Natural Gas Lines (INGL)
signed an agreement with Phoenicia Israel-America Flat Glass on Tuesday to
provide a natural gas connection to the factory, which has been in danger of
closing due to its financial state.
The signing followed the cabinet’s
approval of the connection at Sunday’s cabinet, but is the result of an original
government decision to hook up Phoenicia – located in the Zipporit Industrial
Zone, just outside Nazareth – to the gas lines at the end of
2005.
Phoenicia is Israel’s sole producer of float and low-iron glass,
generating other products as well, including laminated safety glass, tempered
glass, solar energy glass and mirrors, according to the company. The delay in
the natural gas hookup had put Phoenicia at risk of closing, and the company
owes an estimated NIS 323 million in debts, primarily to suppliers and banks,
according to Globes.
Phoenicia has been working since August under a stay
of proceedings, which was extended to October 31 last week. In September, Energy
and Water Minister Uzi Landau originally submitted a proposal to the government
to connect Phoenicia Glass to the natural gas transmission lines, which would
allow the company to begin receiving gas by 2014.
Connection to natural
gas would save the company around NIS 20m. in expenditures, Landau had written
in his proposal.
At the signing, Ron Haimovsky, chairman of Israel
Natural Gas Lines (INGL) praised the minister for his involvement and for the
pressure he put on the government to get approval for the connection, while INGL
CEO Shmuel Turgeman stressed the importance of getting industry running on
natural gas in general.
“We will continue to muster our efforts and see
this project through until it is finished,” Landau said.
For six years,
Phoenicia has been waiting for its natural gas hookup, though “at the beginning
we weren’t sure there was gas in Israel,” Phoenicia CEO Eran Haimovitz told The
Jerusalem Post at the ceremony.
“When there was gas, there were a lot of
promises, talks from the government,” Haimovitz said.
The agreement calls
for transmitting gas to the factory through an INGL pipeline by April 2014,
meaning that the company will still need an intermediary
solution.
Assuming that the firm receives approval from the Natural Gas
Authority, Phoenicia will temporarily import Compressed Natural Gas (CNG) by the
private company SupraGas beginning in September 2013, Haimovitz
explained.
Having natural gas available for the factory’s energy needs
will do wonders for Phoenicia, which had been suffering losses directly due to
its energy sources, according to Haimovitz. The natural gas, he stressed, will
bring the company to “a better future.”
“The effect of the lack of
natural gas for the company was $15m. per year for a company with an $80m.
yearly revenue,” he said.
As the country prepares itself for the vast
amounts of natural gas that will come to its shores from the Tamar and Leviathan
reservoirs in the near future, Haimovitz said he is confident that the
government will keep domestic industries like his as a priority over
export.
“I am sure they will support internal industry first and then
export natural gas to Jordan,” he said.