NewMed Energy Cancels Dalia Gas Deal Despite Antitrust Approval
Translated & summarized from Calcalist by baba
NewMed Energy has canceled a NIS 6.7 billion gas deal with Dalia Energy, citing a failure to meet conditions precedent, specifically the timely approval from the Competition Authority. Dalia Energy disputes the cancellation, asserting the agreement remains valid, and a legal battle is anticipated. The deal, signed in May, was for gas supply to Dalia's power stations, with NewMed and Ratio committing to provide gas from the Leviathan field starting in 2030.
The story in 6 lines · by baba
- NewMed Energy canceled a NIS 6.7 billion gas deal with Dalia Energy, citing unmet conditions.
- Dalia Energy disputes the cancellation and insists the agreement remains valid.
- The Competition Authority approved the deal, but NewMed claims it was too late.
- The deal was for natural gas supply from the Leviathan field to Dalia's power stations.
- Legal disputes are expected between the two energy companies.
- Higher export prices may be an alternative reason for the cancellation.
NewMed Energy, controlled by Yitzhak Tshuva and holding approximately 45% of the Leviathan gas field, announced on Tuesday that its gas deal with Dalia Energy is canceled. The company cited the "non-fulfillment of all the conditions precedent to the agreement according to the dates stipulated therein." While the Israeli Competition Authority approved the deal on Monday, NewMed Energy's official reason for cancellation is that the approval was not granted within the agreed timeframe.
Dalia Energy, controlled by George Horesh, insists the agreement remains valid, suggesting the matter may lead to legal disputes. Industry sources speculate that other factors, such as potentially higher export prices for the gas, might have contributed to the cancellation of the NIS 6.7 billion deal.
The agreement, signed in May, was intended to secure natural gas supply for two power stations Dalia is building in Ashdod and Tzafit. NewMed Energy and Ratio, which together hold about 60% of the Leviathan field, committed to supplying 1.3 billion cubic meters (BCM) of gas annually starting in January 2030, with the amount intended to increase to 1.7 BCM per year. The contract was for twenty years from the commercial operation date of the stations.
NewMed and Ratio had informed Dalia in late September that the agreement was canceled due to unmet conditions, primarily the timely approval from the Competition Authority. Dalia immediately rejected the cancellation, maintaining the agreement's validity. The Competition Authority stated on Monday that the deal poses no antitrust concerns and would not significantly harm competition.
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