Palestine Power Generation Company Cancels Israel Gas Deal

The Palestine Power Generation Company (PPGC) has cancelled a deal to buy natural gas from Leviathan field off Israel citing delays in development of the project, Delek Group, a partner in the project said Thursday.

Uncertainty surrounds development plans of Leviathan after Israel's competition regulator in December recommend the break-up of monopoly control of the country's offshore gas reserves by Noble Energy and Delek Group, which hold 85 percent of Leviathan.

“The Partnerships hereby announced that on March 10, 2015, PPGC gave a conditioned cancellation notice to the Leviathan partners on the Supply Agreement due to the non-fulfillment of the conditions precedent set forth in the agreement, and essentially non-receipt of the approval of the Antitrust Authority, the delay in approving the development plan of the Leviathan project as well as other regulatory approvals required by law, as set out in the Supply Agreement,” Delek said.

In January last year, Delek Group on said that partners in Israel's Leviathan natural gas field have signed a 20-year deal to sell $1.2 billion worth of gas to the Palestine Power Generation Company (PPGC), 

Partners in the field are Noble Energy with a 39.66 percent stake. Delek Drilling and Avner Oil Exploration, part of Delek Group, hold 22.67 percent each and Ratio Oil Exploration owns 15 percent.

The cancellation will take effect in 30 days, unless anti-trust approval is secured before then, Delek said.

Leviathan field is estimated to hold 537 bcm of natural gas.