Israel's natural gas.
(photo credit: MINISTRY OF NATIONAL INFRASTRUCTURES)
The Israel Electric Corporation has elected to partially exercise its option to increase its gas purchases from the Tamar reservoir for the years 2020 through 2028, the company reported to the Tel Aviv Stock Exchange and Israel Securities Authority.
In IEC’s original March 2012 deal with the Tamar basin partners, the company agreed to purchase between 42.5 billion cubic meters and 78 bcm of gas from the 282-bcm reservoir, according to a “take or pay” scheme. The contract covered a 15-year period, beginning in March 2013, when Tamar gas began to flow into Israel.
As part of the initial agreement, IEC also received the option to increase the purchase amount to up to 99 bcm, a decision that needed to occur by last Wednesday.
Following a round of discussions regarding potential alternatives, as well as risk assessments and forecasts of consumer needs, the IE board elected to partially exercise this option, the company explained on Thursday.
“We are now in an era of expanding competition in electricity generation,” said IEC chairman Yiftah Ron-Tal. “The decision of the board of directors strikes a balance between two major interests: one, our existence as a business in a competitive environment; and two, the responsibility imposed upon us as a national company and as an essential service supplier to the economy, and the obligations derived from this.”