Dalia Power Plant Takes Leviathan Gas Deal Dispute to London Arbitration

The dispute over a major gas deal between Israel's Leviathan field and the private Dalia Power Station is moving to international arbitration in London. Dalia Energy, which operates the Dalia Power Station, filed a request with the London Court of International Arbitration (LCIA) against NewMed Energy, controlled by Yitzhak Tshuva's Delek Group, and Ratio Energies. Dalia Energy is seeking three declaratory judgments: that the sellers' cancellation of the deal on September 24 was invalid, that the agreement remains in effect even if the cancellation notice was valid, and that the deal should proceed. The agreement, signed in May, was set to supply gas for 20 years, from 2030 to 2050, to two new power plants Dalia is building. 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.

NewMed and Ratio announced the deal's cancellation in late September, citing unmet conditions, including approval from the Antitrust Authority and completion of financing. Dalia Energy immediately rejected the cancellation, asserting that all conditions were met after the Antitrust Authority approved most of the agreement with a minor restriction. Analyst Lior Vider suggested the cancellation was an aggressive negotiation tactic by the sellers to renegotiate terms 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 related to the Tamar field.