Bethel Finance: Landau presses IEC to seal Tamar gas deal

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Bethel Finance news:

Minister of National Infrastructures Uzi Landau is pressing the Israel Electric Corporation (IEC) (TASE: ELEC.B22) to sign a huge natural gas purchase agreement with the Tamar gas field partners.

During a meeting that Landau convened yesterday to discuss Israel's electricity grid, he surprised the senior officials present when he said, "The saga of the gas agreement is never ending. We cannot leave the entire economy dangling in the air like this for so long. People looking in from the outside are saying that we cannot carry on like this and we have to see this agreement completed. The timetable, at least from my point of view, seems totally unreasonable."

Landau even warned that if the IEC does not conclude an agreement, it might be advisable to appoint an external consultant to conduct procurement talks for the gas purchases.

Landau's intervention comes as the Tamar partners claim that if an agreement is not signed before the end of 2011, then development of the gas field could be delayed. According to the financing agreement signed by two of the partners - Delek Group Ltd. (TASE: DLEKG) and Alon Natural Gas Exploration Ltd. (TASE: ALGS) - they must have a signed agreement with the IEC by December 26 to receive funding for the project. The deadline can be extended by six months in certain circumstances.

Ministry of National Infrastructures director general Shaul Tzemach made it clear to "Globes" that during yesterday's discussions Landau was not trying to say that the IEC should close a deal at any price. He said, "If there is any pressure it is on the other side to reach an agreement."

Landau said that Israel's electricity grid must be developed in such a way as to increase reserve capacity by 2020 to 20% of production capability. He said, "We want to see a development plan that will ensure the State of Israel will have enough electricity in the coming years."

The Tamar partners are Noble Energy Inc. (NYSE: NBL) which owns 36% of the gas field, Delek Group units Delek Drilling LP (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L) each own 15.625%, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) owns 28.7%, and Alon Natural Gas Exploration Ltd. owns 4%.