A new threshold has been reached in the price of natural gas: $8.50 per million British Thermal Units (BTU) - the price reportedly reached in a contract yesterday between Yam Tethys partners Delek Group Ltd. (TASE: DLEKG) and Noble Energy Inc. (NYSE: NBL) and Hadera Paper Ltd. (AMEX: AIP; TASE: AIP). The higher price is reportedly due to the rise in the price of oil, אם which natural gas prices are partly linked, and to the fact that this is a short-term contract.
The price in the contract may reflect prices in upcoming large gas contracts with Israel Electric Corporation (IEC) (TASE: ELEC.B22) and Israel Corporation (TASE: ILCO), and it could affect the pricing of the Tamar and Leviathan gas reserves.
A notice to the TASE by Delek units Avner Oil and Gas LP (TASE: AVNR.L) (which owns 23% of Yam Tethys) and Delek Drilling LP (TASE: DEDR.L) (which owns 25.5%) states that the gas supply contract with Hadera Paper is for two years. The contract follows a five-year contract which expires at the end of June. Hadera Paper uses natural gas for its production and to operate a small power station. Delek and Noble Energy will supply the gas from Yam Tethy's Mari B well, offshore from Ashkelon.
The reason for the contract's short period is that Yam Tethys's reserves will deplete over the next two years, and it is due to be replaced by the Tamar reserves, which are due to come online in 2013.
Delek and Noble Energy will supply 210 million cubic meters of natural gas. The companies stated that the current value of the gas at the signing of the deal is $63 million, which equals $8.50 per million BTU, the highest price ever set in a natural gas contract with Israeli customers.
The price of gas in contracts with IEC, Dalia Power Energies Ltd., Dorad Energy Ltd., and Israel Corp. ranged from $4 to $5.50 per million BTU.
Delek Group's share price rose 1.4% in morning trading to NIS 887.70 Delek Drilling's share price rose 0.6% to NIS 12.57, and Avner's share price 0.6% to NIS 2.19.
No comments:
Post a Comment