Representatives of Israel Electric Corporation (IEC) and the "Tamar" partnerships signed the country's largest ever gas supply contract today. Under the agreement, IEC will buy a basic quantity of 3 billion BCM of gas annually from Tamar for 15 years. The quantity is expected to grow over the contract period, subject to certain conditions.
The initial price of the gas is estimated at $5.2 per mmbtu. The price is linked to a formula based on the US Consumer Price Index.
The deal is the most complex yet signed in Israel, and many obstacles and objections arose along the way. The last obstacle to completion of the deal was the IEC board's demand, which was accepted, to introduce two exit points into the contract, at which the price of the gas can be adjusted by 35-40%.
The agreement will now be submitted for approval by the Public Utilities Authority Electricity and the Antitrust Authority.