Dalia Energy Seeks International Arbitration Against Leviathan Partners
Translated & summarized from Calcalist by baba
Dalia Energy has filed for international arbitration in London against NewMed Energy and Ratio, partners in the Leviathan gas field, to enforce a $6.7 billion gas supply deal. The partners had canceled the agreement, citing unmet conditions, but Dalia seeks to uphold it for its new power plants. The arbitration is expected to take at least a year, and the outcome could affect Dalia's future energy costs.
The story in 5 lines · by baba
- Dalia Energy initiated international arbitration in London against NewMed Energy and Ratio.
- The dispute concerns a $6.7 billion gas supply agreement for Dalia's new power plants.
- NewMed and Ratio had previously canceled the agreement, citing unmet conditions.
- The arbitration process is expected to last at least one year.
- Dalia's two new power plants are scheduled to begin operation by July 2029.
Energy company Dalia has initiated arbitration proceedings in London against NewMed Energy and Ratio, partners in the Leviathan gas field. Dalia is seeking to enforce a gas supply agreement for its power stations, despite the partners' earlier cancellation of the deal. The agreement, valued at approximately $6.7 billion, was set to supply gas from 2030 to 2050 to two new power plants Dalia is constructing. This deal was notable as a "sell separately" agreement, where NewMed and Ratio agreed to sell gas, but the third Leviathan partner, Chevron, did not participate. The cancellation by NewMed and Ratio was officially attributed to unmet conditions, with a dispute arising over the calculation of a 90-day period for these conditions. Industry observers suggest the cancellation may stem from a desire to renegotiate terms or secure a shorter contract. The arbitration, expected to last at least a year, will involve three arbitrators. Dalia's power plants, located in Ashkelon and Tzafit, are each designed for 850 megawatts and are slated to begin operation by July 2029, with a total construction cost of around 10 billion shekels. Dalia has secured financing for these projects and has a separate, smaller gas supply agreement with Energean, which would cover 35% of its needs, with Leviathan partners supplying the remaining 65%. If the dispute with NewMed and Ratio is not resolved favorably for Dalia, the company may face higher gas costs.
Mentioned
