Three months after Israel Corp. (TASE: ILCO) and Israel Petrochemical Enterprises Ltd. (TASE:PTCH) acquired control of Oil Refineries Ltd. (TASE:ORL), the company is making its first strategic move against Paz Ashdod Refinery Ltd., controlled by Bino Holdings Ltd. through Paz Oil Company Ltd. (TASE:PZOL). Sources inform ''Globes'' that Oil Refineries is negotiating to set up a fuel storage and distribution terminal in central Israel at an estimated investment of $50-60 million.
Oil Refineries has begun searching for a site for the terminal in the Ashdod area, which will serve central and southern Israel.
Before the split up and privatization of Oil Refineries, the Haifa refinery delivered fuel products to the Ashdod refinery and the adjacent Pi Glilot Petroleum Terminals and Pipelines Ltd. terminal, which distribute the products to customers. Following the split of the company and the sale of the Ashdod refinery to Paz, Oil Refineries had problems marketing fuel products in the south, and lost its storage facilities at Pi Glilot’s Ashdod terminal after Pi Glilot leased Oil Refineries’ tanks to a third party.
The fuel market considers the Ashdod area to be strategically important because of its proximity to the Eilat-Ashkelon Pipeline Co. (EAPC) dock in Ashkelon and Pi Glilot’s terminal in Ashdod itself. Building a new terminal in Ashdod will give Oil Refineries better fuel distribution and marketing capability in central Israel. It will also help the company expand its crude and refined oil import and export capacity through the EAPC dock.
In February, Ofer Brothers acquired Oil Refineries through Israel Corp. together with a consortium of Petrochemical Enterprises and Glencore International AG of Switzerland. Oil Refineries CEO is Mordechai Ben-Shach and its CEO is Ohad Marani. Israel Corp will reportedly obtain a control permit for the company by the end of May, and Petrochemical Enterprises will join the controlling core later, when Glencore obtains a permit.
Published by Globes [online], Israel business news - www.globes.co.il - on May 21, 2007
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