Gas Deal Dispute Intensifies Between Dalia Energies and NewMed-Ratio
Translated & summarized from Ice by baba
Dalia Energies insists a $6.7 billion, 20-year natural gas supply deal with NewMed Energy and Ratio Oil Exploration is valid, despite the latter's cancellation notice. The Competition Authority approved the deal's main terms, though further discussions are needed on secondary gas trading. NewMed and Ratio, controlling 60% of the Leviathan field, had sought to cancel the agreement. Dalia plans to enforce the contract, potentially leading to legal action.
The story in 5 lines · by baba
- Dalia Energies claims a $6.7 billion gas deal with NewMed and Ratio is valid after Competition Authority approval.
- NewMed and Ratio, controlling 60% of Leviathan, previously announced the deal's cancellation.
- The Competition Authority approved the deal's core terms but referred secondary gas trading to further discussion.
- Dalia Energies plans to enforce the 20-year contract for its new power stations.
- The dispute between Dalia and NewMed/Ratio may now proceed to legal channels.
A dispute over a significant natural gas deal between Dalia Energies and NewMed Energy and Ratio Oil Exploration has escalated. Dalia Energies announced that all conditions for the $6.7 billion, 20-year agreement have been met, rendering the cancellation notice from NewMed and Ratio invalid. The company stated its intention to enforce the contract and uphold its rights.
The deal, initially signed in May after a year of negotiations, aims to supply natural gas to two power stations Dalia is constructing in the Tzafit and Eshkol complexes. NewMed and Ratio, which jointly control approximately 60% of the Leviathan gas field, had announced the deal's cancellation in late September, citing, among other reasons, the failure to secure timely approval from the Competition Authority.
Dalia had previously rejected the cancellation, asserting the agreement remained valid. On Tuesday, the Competition Authority approved the deal, finding no antitrust issues with its core terms, including the contract duration and the "take or pay" mechanism. However, the authority referred the parties to further discussions regarding a limitation on secondary gas trading, allowing Dalia to sell up to 15% of its purchased gas to a third party.
Dalia dismissed the possibility that this remaining issue justified the cancellation, expressing surprise at NewMed and Ratio's attempt to void the agreement after lengthy negotiations and just after receiving regulatory approval. NewMed and Ratio are expected to supply Dalia with approximately 1.3 billion cubic meters of gas annually, increasing to 1.7 billion cubic meters from 2035 for the new 850-megawatt power stations, which are slated to begin supplying electricity before the end of the decade.
This deal marks the first time NewMed and Ratio are jointly selling gas from the Leviathan field, separate from their partner Chevron. With the Competition Authority's approval, the dispute persists, and Dalia insists the contract is binding. NewMed and Ratio previously declared the deal canceled, suggesting the conflict may now move to legal proceedings.
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