The amendment to the gas agreement between the IEC and the Tamar reservoir was signed

The amendment to the IEC's natural gas agreement was signed with the Tamar partnership.

The amendment to the agreement changes the terms of the agreement signed in 2012 in a way that benefits the IEC, with an emphasis on the linkage mechanism and the price of the quantity to be purchased.

IEC CEO: "Good news for the public"

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Of money

24/01/2022

Monday, 24 January 2022, 13:31 Updated: 13:49

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The Electric Company and the Tamar Partnership signed the amendment to the original agreement between them from 2012. According to the agreement from 2012, the parties undertook to allow the price discussion to open (for changes of up to 25% both in price and discount) starting in July 2021.

In the original agreement, the IEC undertook to pay for 3 bcm (the amount of the base), at a price linked to the American index + \ - 1%, which resulted in a price of $ 6.36 per unit of heat.

In the new agreement, a discount of 29% was obtained: since the price of the new base quantity is about $ 4.5 with the hedging of the linkage of the rise of the American index in the range between 2.25% and 3.75%.

Another change agreed upon by the parties is that in the original agreement it was stipulated that in July 2024 the price will open to an additional plus / minus 10 percent, while in the new agreement, the additional opening for the base amount will take place at the end of

2024 Millions of shekels, according to the IEC.

Moreover, in the 2012 agreement, Tamar's partners undertook to save the electricity company an additional 3.5 bcm each year, which will be sold at the price of the base quantity linked to the American index (at $ 6.36 as of today).

In the new agreement, Tamar undertakes to keep the same quantity and sell it at a price of less than $ 4, the lowest price in Israel and without any linkage.

The IEC will purchase, according to its operational needs 16 bcm (the operational quantity), out of this quantity, spread over the years (until the end of 2030).

The IEC stated that as part of the risk management, the company believes that it is better to have 16 bcm "by hand" at the cheapest price in Israel, when the reservoir has an obligation to keep the IEC quantity and without any additional minimum obligation (except on the basis of operational need). It is known to no one that it is likely that the quantities will not be guaranteed without a minimum company commitment.

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IEC CEO Ofer Bloch (Photo: Official Website, Eyal Yitzhar, Globes)

"The original agreement was signed in an environment of uncertainty"

Ofer Bloch, CEO of the Israel Electric Corporation

: "The nature of a long-term agreement is that it contains clauses that only in retrospect turn out to be more or less good.

The original Tamar agreement was signed in an environment of uncertainty and was the first of its kind in the economy.

The renewed agreement we are bringing today is in line for the public.

The price of gas that the IEC will pay to supply in its overall production mix, provides stability at a good price and reflects the result of stubborn and high-quality

negotiations

. "

Avi Deutschman, VP of Production and Energy Ram Erlichman, Director of the Fuel Division, Samson Brockman

.

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Tags

• Electric Company

• IEC

• Natural gas

• Tamar