A contract to buy natural gas from BG Group plc (NYSE: BRG; LSE: BG) (British Gas) is nearing the final stage. Sources inform ''Globes'' that Accountant General Dr. Yaron Zelekha yesterday set up a government tenders committee that will approve the purchase of natural gas from the company in a ten-year contract worth an estimated $2.5 billion.
In accordance with the cabinet decisions of two weeks ago, the contract with British Gas will probably be exempt from tender obligations. On the other hand, the state’s distribution contracts with customers will probably be through tenders.
Deputy Accountant General Ami Landau will head the tenders committee. Other members will be representatives of the Ministries of Justice, National Infrastructures, Interior, Defense, and Ministry of Finance Budget Office. A subcommittee chaired by Ministry of National Infrastructures director general Hezi Kugler and Ministry of Finance director general Yarom Ariav has been set up to reach a final contract with British Gas.
The Ministries of Finance and National Infrastructures predict that negotiations with British Gas will take four months at the most. Negotiations will begin at $4 per British Thermal Unit (BTU), slightly higher than the $3.80-3.90 per BTU than Egypt’s East Mediterranean Gas Company (EMG) is offering. In the upcoming round of talks, the Israeli team will try to get a lower price.
Published by Globes [online], Israel business news - www.globes.co.il - on May 14, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007