Delek Group: Amendment to Agreement for the Supply of Natural Gas betweenthe Israel Electricity Corporation and the Tamar Partners
OREANDA-NEWS. Delek Group (TASE: DLEKG, US ADR: DGRLY) (“the Company”) announces that an immediate report has been published by Avner Oil Exploration Limited Partnership and Delek Drilling Limited Partnership ("the Partnerships"), as quoted below, concerning an amendment to the natural gas supply agreement between the Tamar Partners and the Israel Electricity Corporation in respect of exercising the option to increase the quantities of gas the Israel Electricity Corporation will require.
Pursuant to what was stated in section 7.13.4(A)(4) of the Partnerships' Annual Reports to December 31, 2015 that was published on March 28, 2016 ("the Annual Report") concerning the agreement of the Partners in the Tamar project including the Partnerships ("Tamar Partners") and the Israel Electricity Corporation Ltd, including inter alia options for two periods, as stipulated in the Annual Report ("IEC" and "the Agreement", respectively), and in section 3 to the update to Chapter 1 (Description of the Partnerships' Business) of the Annual Report as included as part of the Partnerships' quarterly reporting to March 30, 2016 and June 30, 2016, it is hereby announced that on September 1, 2016 the Tamar Partners and IEC signed an amendment to the Agreement concerning exercising the option to increase the quantities the IEC will require ("Amendment to the Agreement").
In the Amendment to the Agreement it is stipulated that commencement of the first option period and the increase in the quantity of gas that will be supplied to the IEC will be January 2017 and will run until the end of 2018 (instead of until the end of 2019 as stated in the Agreement), and that commencement of the second option period and the increase in the quantity of gas that will be supplied to the IEC will be January 2019 (instead of until the beginning of 2020 as stated in the Agreement) and will continue until the end of the Agreement period. Namely, the minimum amount to charge (Take or Pay) will be 3 BCM (billion cubic meters) for the year commencing January 1, 2019 until the end of the Agreement period. The contractual amount to supply (for the entire Agreement period) will remain unchanged at 87 BCM.
The Amendment to the Agreement has been signed inter alia due to concerns about utilization of the capacity of the gas pipeline from the Tamar Project to the Israeli market in 2019, with the objective of freeing up capacity of the pipeline and to facilitate additional quantities of natural gas from the Tamar Project for other consumers in the market.
The Anti-Trust Authority has confirmed that the said amendment to the option dates in the Agreement is acceptable to the Authority. The Amendment to the Agreement is subject to receipt of the approval of the bodies financing the Tamar Partners.
The Partnerships estimate, in the light of the Tamar Project's existing agreements, as specified in section 7.13.4(A) of the Annual Report and based on the Partnerships' estimates of forecast demand for the supply of natural gas from the Tamar Project, that signature of the Amendment, as stated above, will not have a material impact on the Tamar Project's forecast discounted cash flow, as stated in section 7.4.9(A)(3) of the Annual Report.
Warning concerning forward looking information - the information presented above concerning changes to the dates for the supply of quantities of natural gas for the IEC as part of the option, as stipulated in the Amendment to the Agreement, in the estimation of the Partnerships concerning the impact of the Amendment to the Agreement on the Tamar Project's forecast discounted cash flow, and receipt of the approval of the bodies financing the Tamar Partners, represent forward looking information in the meaning of the term in section 32a of the Securities Law, 1968, for which there can be no certainty that it will take place, in whole or in part, in the manner stated or in any other manner, in whole or in part, and it may take place in a materially different manner, on account of various factors including non-fulfillment of the contingent terms of the Amendment to the Agreement.