Leviathan partners bid in $3 billion Cyprus gas tender

Cyprus is seeking 0.7-0.95 BCM of gas a year for 10 years from 2016/17.

OIL gas

The partners in the Leviathan natural gas field – Noble Energy Inc. (NYSE: NBL),  Delek Group Ltd. (TASE: DLEKG), and Ratio Oil Exploration (1992) LP (TASE:RATI.L) – have bid in a $3 billion Cypriot tender for the supply of 0.7-0.95 billion cubic meters (BCM) of gas over ten years. The natural gas will used by the Vasilikos Power Station.

The tender by the Cypriot Natural Gas Public Company (DEFA) has two options: one is for the supply of gas from early 2016, and no later than the second half of 2017, through 2022, followed by three one-year options to extend; the second is for the supply of gas through 2025.

The tender will be closed on August 21, by which time the bidders must have financial closing for developing the Leviathan project and building a pipeline to Cyprus, and obtaining all regulatory permits.

The partners in Leviathan have a good chance of winning the tender, as they can only supply gas from the  Cypriot Natural Gas Public Company (DEFA) , which Delek and Noble energy own with Isramco Negev 2 LP (TASE: ISRA.L) and Alon Natural Gas Exploration Ltd. (TASE: ALGS), during its nighttime surplus production. Israel is the only country that can deliver natural gas to Cyprus via pipeline or compressed natural gas (CNG). The Tamar partners have signed two foreign gas supply contracts this year: a $500 million contract with Jordan’s Arab Potash Company and Jordan Bromine Company, and a $1.2 billion contract with the Palestinian Authority.

In today’s notice to the Tel Aviv Stock Exchange (TASE), the partners in Leviathan said that, on April 7, Antitrust Authority director general David Gilo notified them that he would not take enforcement measures related to the sale of natural gas to Cyprus until his final decision on the joint sale of gas from Leviathan.

In January, Gilo said that if Delek and Noble Energy did not allow competition in the Israeli natural gas market, he was prepared to take them to court to secure some competition in the long term.

Published by Globes [online], Israel business news – www.globes-online.com 

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