Dalia Power Plant Initiates International Arbitration Over Leviathan Gas Deal
Translated & summarized from Globes by baba
The Dalia Power Station has initiated international arbitration in London against NewMed Energy and Ratio Energies over a canceled 20-year gas supply deal from the Leviathan field. Dalia seeks to enforce the agreement, arguing the sellers' cancellation was invalid and conditions were met after Antitrust Authority approval. The dispute highlights aggressive negotiation tactics amid high gas demand and potential export opportunities.
The story in 5 lines · by baba
- Dalia Power Station filed for international arbitration in London against NewMed Energy and Ratio Energies.
- The arbitration concerns a canceled 20-year gas supply deal from the Leviathan natural gas field.
- Dalia seeks to enforce the agreement, claiming the sellers' cancellation was invalid.
- The deal's cancellation followed Antitrust Authority approval with minor restrictions.
- Analysts suggest the cancellation is an aggressive negotiation tactic amid high gas demand.
The dispute over a major gas deal between Israel's Leviathan field and the private Dalia Power Station is moving to international legal arbitration. Dalia Energy, which operates the Dalia power station, announced it has filed a request for arbitration at the London Court of International Arbitration (LCIA). The arbitration is against NewMed Energy, controlled by Yitzhak Tshuva's Delek Group, and Ratio Energies, the sellers of the gas.
Dalia is seeking three declaratory remedies: that the sellers' cancellation of the deal on September 24 was invalid and contrary to law, that the agreement remains in effect even if the cancellation notice was valid, and that the deal should proceed because the Antitrust Authority's approval was granted within the stipulated timeframe. Dalia wants the agreement to be enforced.
The agreement, signed in May, was set to supply gas for 20 years (2030-2050) to two new power stations Dalia is building. The price was set at $4.7 per heat unit, with a renegotiation clause for 2041. NewMed Energy holds about 45% of the Leviathan field and is responsible for roughly three-quarters of the deal's volume, with Ratio Energies responsible for the remainder.
In late September, NewMed and Ratio announced the deal's cancellation, citing failure to meet conditions such as Antitrust Authority approval and financing completion. Dalia rejected this, and subsequently, the Antitrust Authority approved most of the deal, with a minor restriction on third-party gas sales. Dalia argued this fulfilled all conditions.
Analyst Lior Vider suggested the cancellation was an aggressive negotiation tactic by the sellers due to high natural gas demand and profitable export opportunities, warning of a potential intense legal battle. This is the first joint sale of Leviathan gas by NewMed and Ratio, separate from the field's operator, Chevron. It is also the second arbitration in London concerning the local gas market, following a dispute over a gas deal with the Israel Electric Corporation from the Tamar field.
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