Bethel Finance: Use of Yam Tethys gas up 31% in 2011

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Disruptions in Egyptian natural gas deliveries during 2011 and the resulting increased pumping from Israel's only offshore reservoir, Yam Tethys, resulted in a 31% increase in its use compared with 2010 and a 67% drop in use of Egyptian gas, the Natural Gas Authority reports. Israel's natural gas consumption fell 7% last year, compared with 2010.

As a consequence of the increased pumping from Yam Tethys, owned by Delek Group Ltd. (TASE: DLEKG) and Noble Energy Inc. (NYSE: NBL), it will be depleted by the end of 2012, before deliveries from the Tamar reservoir, owned by the same companies together with Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) and Alon Natural Gas Exploration Ltd. (TASE: ALGS), can begin. Gas deliveries from the offshore Tamar discovery are scheduled to begin in mid-2013.

Egyptian natural gas is supplied to Israel by East Mediterranean Gas Company (EMG), in which Yosef Maiman owns 20.6% stake through Ampal-American Israel Corporation (Nasdaq: AMPL; TASE:AMPL) and his private company Merhav Group. Israeli institutional investors also own 4.4% of EMG. EMG's deliveries were disrupted due to repeated attacks on gas pipelines and facilities in Sinai.

The Natural Gas Authority says that Egypt delivered natural gas on 137 days in 2011, and at lower quantities than in previous years.

Israel Electric Corporation (IEC) (TASE: ELEC.B22) consumed 4.07 billion cubic meters (BCM) of gas in 2011, 82% of Israel's total gas consumption. Two more IEC power stations were hooked up to the national gas pipeline network during the year: Haifa, and Alon Tavor in the Galilee. Nonetheless, disruptions in supply resulted in a 14% drop in gas consumption compared with 2010. The reduced gas deliveries forced IEC to increase its purchases of more expensive diesel to generate electricity.

Six private sector consumers also hooked up to the pipeline network last year: Israel Chemicals Ltd. (TASE: ICL) units Rotem Amfert Negev and Periclase in the Negev; Haifa Chemicals Ltd's plant at Mishor Rotem in the Negev; Oil Refineries Ltd. (TASE:ORL) in Haifa; Makhteshim Agan Industries Ltd. plants in Ashdod and at Ramat Hovav in the Negev. By the end of 2011, 11 private sector consumers were hooked up to the gas pipeline network, and they consumed 900 million cubic meters of gas, 54% more than in 2010.