The IEC claims it could lose up to $50 million in the upcoming year due to Chevron refusing to sell gas from Tamar at a reduced rate.
By HAGAY HACOHENTHE PLATFORM for Noble’s Tamar natural gas pipeline, situated some 23 km. off Ashkelon’s southern coast.(photo credit: COURTESY OF NOBLE ENERGY)
Noble Energy, the operator of the Tamar offshore gas field, has suspended the supply of gas to the Israel Electric Corporation following the completion of its acquisition by energy giant Chevron.Chevron’s other partners in Tamar had agreed to sell the IEC gas at about half the current price, which is $6.30 per thermal unit. Now, the company has decided to suspend supply of gas to the IEC.Strategic Affairs Minister Orit Farkash-Hacohen called on the government to “make it clear to the company [Chevron] that... the Israeli public comes first.” She said this obligation is valid even when “large sums of money [are] in the game.”Former Joint List MK Dov Khenin said that “the great looting is ongoing under the guise of the COVID-19 crisis.”The IEC appealed the decision to the Israel Competition Authority (ICA) on Wednesday, demanding that it investigate Noble Energy, which was bought for $4.2 billion by Chevron.The IEC claims it could lose up to $50 million in the upcoming year due to Chevron refusing to sell gas from Tamar at a reduced rate.The letter to the ICA accused Noble Energy of “keeping the Israeli energy market as a hostage” with the goal of “totally suppressing competition in the natural gas market and boosting its own profits.”Noble Energy and Delek control 47% of Tamar, while other partners such as Isramco (28.75%) and Tamar Petroleum (16.75%) own parts of it as well. However, Noble Energy and Delek control 85% of the Leviathan gas field. This means that when the IEC is forced to buy gas from Leviathan to meet demands, these two companies make more money.The IEC claimed in the letter that Noble Energy is acting “as a bully” and expressed hope that the refusal to provide it with gas “isn’t the indication of the [new] philosophy of doing business that came here with Chevron.”The other partners in the Tamar gas field joined the IEC in appealing to the ICA for aid, citing that Noble Energy has a conflict of interest – due to it owning more shares in the Leviathan gas field than it does in Tamar.In an official statement, Chevron said that it did not discontinue operations from its facilities in Israel and they continue to "provide for Israel's energy needs." It further explained that "these are very early days" to its entering the Israeli market and stated "we continue to build relationships with all of our stakeholders."In the press release, Chevron points out it had been in business for 141 years and "firmly believes in the sanctity of contract."
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