New CEO of NewMed Energy Challenges $6.7 Billion Gas Deal
Translated & summarized from Globes by baba
NewMed Energy, under its new CEO Niv Serner, is challenging a $6.7 billion gas deal with Dalia Power Plants, despite partial approval from the Antitrust Authority. The company's insistence on canceling the agreement, signed in May 2026, is seen by some as a negotiation tactic to secure better terms. The dispute could lead to arbitration in London, with the deal's supply not set to begin until 2030, leaving time for resolution.
The story in 6 lines · by baba
- NewMed Energy is insisting on canceling a $6.7 billion gas deal with Dalia Power Plants, despite partial Antitrust Authority approval.
- The new CEO, Niv Serner, faces a significant test in resolving the dispute over the gas supply agreement.
- Market observers believe NewMed's actions are a negotiation tactic to improve deal terms or gain certainty.
- The agreement, set to supply gas from the Leviathan reservoir, is not scheduled to begin until 2030.
- The dispute may lead to arbitration in London if a resolution is not reached between the parties.
- Ratio, a partner in the Leviathan reservoir, has adopted a more cautious public stance on the issue.
NewMed Energy is insisting on canceling a significant gas supply agreement with Dalia Power Plants, despite the Antitrust Authority approving most of its terms. The deal, valued at $6.7 billion and set to run until 2050, involves supplying gas from the Leviathan reservoir to Dalia's new power stations. Market observers suggest NewMed's stance is a negotiation tactic to secure better terms or greater certainty from the Antitrust Authority, though it could lead to arbitration in London. The possibility of selling gas to the Israel Electric Corporation is also on the table.
The new CEO of NewMed Energy, Niv Serner, backed by parent company Delek Group and managed by Idan Welles, faces a critical test in resolving this massive gas deal. The agreement, signed in May 2026, was crucial for Dalia's plans to build two major power stations, "Dalia 2" and an expansion of the "Eshkol" station. NewMed and Rationa, holding 45% and 15% of Leviathan respectively, were to supply gas to Dalia between 2030 and 2050 at an attractive price, with provisions for price renegotiation.
The Antitrust Authority had concerns, particularly regarding the long-term commitment without a full exit clause. This led to NewMed's surprising announcement of cancellation just before Sukkot. Dalia rejected the cancellation, asserting the agreement's validity. The Antitrust Authority eventually approved the contract's duration and lack of an exit clause but partially restricted the resale of gas to third parties, a clause NewMed reportedly views as essential to prevent price gouging.
This partial approval and the need for self-assessment on the resale clause are seen as potential reasons for NewMed's insistence on cancellation, possibly as a pretext to renegotiate the entire deal. The situation is further complicated by the recent departure of NewMed's long-time CEO, Yossi Abu, and Serner's rapid ascent to the CEO position after only two months as chairman. Serner, with extensive experience in business development and M&A, may believe he can secure a more favorable deal than his predecessor.
Ratio, the smallest partner in Leviathan, has adopted a more measured tone in its public statements. The "injury time" for negotiations extends until 2030, allowing ample time for discussions, potentially including arbitration in London. Analysts like Lior Weider believe the dispute is primarily a negotiation tactic and not an insurmountable obstacle, with the gas flow expected to commence as scheduled.
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