Leviathan Partners Cancel $6.7 Billion Gas Deal with Dalia Energy

Partners in the Leviathan natural gas field, NewMed Energy and Ratio Energies, have announced the cancellation of a major $6.7 billion deal to supply gas to Dalia Energy. The agreement, signed just four months ago, was set to provide Dalia with long-term natural gas for its power generation facilities, including new plants, from the beginning of 2030 through the end of 2049. NewMed and Ratio, who jointly hold approximately 60% of the Leviathan field, claim that the conditions precedent for the deal's activation were not met by the agreed-upon deadlines. Dalia Energy disputes this, stating that the cancellation notice is invalid. While NewMed did not specify which condition was unmet, market speculation points to concerns from the Israel Competition Authority regarding market concentration in the private power station gas supply sector as the primary reason for the cancellation. The deal originally stipulated that NewMed and Ratio would supply Dalia with about 1.3 billion cubic meters of natural gas annually, increasing to approximately 1.7 billion cubic meters later in the contract. The cumulative revenue for the sellers was estimated at $6.7 billion. Chevron, the largest stakeholder in Leviathan with about 40%, is not involved in this disputed transaction. This dispute casts doubt on one of the largest gas contracts signed in Israel in recent years, impacting Dalia's two major power generation projects, Avshalom in Ashdod and Dalia 2 in Tzefit, each planned for around 850 megawatts.