Leviathan partners cancel $6.7b deal with Dalia Energy
NewMed Energy and Ratio Energies, partners in the Leviathan gas reservoir, have cancelled a $6.7 billion deal to supply gas to two new Dalia Energy power plants. Dalia Energy rejects the cancellation, calling it invalid. The official reason is failure to meet preconditions, including finance approval and Competition Authority sign-off. Industry sources suggest the Competition Authority's stance was fairly positive, and the deal may ultimately go ahead.
NewMed Energy, which holds 45% of the Leviathan gas reservoir, together with partner Ratio Energies, has notified the Tel Aviv Stock Exchange of the cancellation of a $6.7 billion deal to supply gas to two new Dalia Energy power plants. The plants are Dalia 2, an 850-megawatt gas-fired station planned for Tel Tzafit, and the Avshal station on the site of the former Eshkol power plant in Ashdod, also 850 megawatts. Dalia Energy says it was surprised by the announcement and completely rejects it, arguing the cancellation has no validity under the agreement terms. The official reason given is failure to meet preconditions: finance approval and Competition Authority approval. The deal covers 2030-2050, with a price of $4.7 per MMBtu and a price reopening clause in 2041. Industry sources suggest the Competition Authority's stance was fairly positive, and finance does not appear problematic for Dalia Energy. The assessment is that the deal will ultimately go ahead, though terms remain unclear.