Gov't to publish $4b gas transportation tender

The government is negotiating with British Gas for the purchase of natural gas at a price of $4 per BTU.

Sources inform ''Globes'' that the government is set to publish a tender for the distribution to the private sector of the gas that will be purchased from BG Group (NYSE: BRG; LSE: BG) (formerly British Gas). The $4 billion tender is believed to be one of the largest the energy economy will see in the coming years.

According to the plans drawn up by the Ministries of Finance and National Infrastructures, large industrial enterprises, private electricity producers, medium-size enterprises, as well as companies that will distribute natural gas to consumers will be able to bid in the tender.

The government is negotiating with British Gas for the purchase of natural gas at a price of $4 per British thermal unit (BTU). This is slightly higher than the price offered by Egypt’s East Mediterranean Gas Company ($3.8), in which Joseph (Yossi) Maiman is a partner. The tenders committee, headed by Ministry of Finance Deputy Accountant General Ami Landau, is set to make another attempt to persuade British Gas to lower their asking price. However, ministerial sources believe that consumers will be willing to pay a higher price for the gas, in the knowledge that government can guarantee supply, rather than buy from a private company.

Published by Globes [online], Israel business news - www.globes.co.il - on May 10, 2007

© Copyright of Globes Publisher Itonut (1983) Ltd. 2007

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