“Price dispute delaying BG gas contract”

Merhav MNF VP Nimrod Novik: EMG gas deliveries will begin late this year, ahead of schedule.

“A dispute over prices is delaying the signing of a contract with British Gas,” says Ministry of Finance Accountant General energy coordinator Uri Shusterman. He made the comment at an Israel Center for Management conference today.

The statement was the first comment by a government official about the negotiations with BG Group plc (NYSE: BRG; LSE: BG) to become an additional natural gas supplier to the Israeli market. Shusterman said that, despite the disagreement, the government was determined to buy gas from the company’s reserves offshore from Gaza, as an alternative to Egyptian gas.

Shusterman said, “It’s a national interest to promote competition in the gas market. The state isn't operating on the basis of profit and loss, and we’ll sell the gas we buy from British Gas to consumers at exactly the same terms.”

He added that the state planned to buy 1.5-1.8 billion cubic meters (BCM) of natural gas a year from BG over 12-14 years. Deliveries are due to begin within three years, assuming that a commercial contract is signed.

Merhav MNF VP Nimrod Novik said that East Mediterranean Gas Company (EMG) was moving forward on the building of a natural gas pipeline from El Arish in Sinai to Ashkelon, and that deliveries of Egyptian gas would begin in late 2007, ahead of schedule.

Published by Globes [online], Israel business news - www.globes.co.il - on July 2, 2007

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

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