Chevron halts supply of gas to IEC
Farkash- Hacohen: Gov’t needs to make it clear that Israeli public comes first
Noble Energy, the operator of the Tamar offshore gas field, has suspended the supply of gas to the Israel Electric Corporation following the completion of its acquisition by energy giant Chevron.
Chevron’s other partners in Tamar had agreed to sell the IEC gas at about half the current price, which is $ 6.30 per thermal unit. Now, the company has decided to suspend supply of gas to the IEC.
Strategic Affairs Minister Orit FarkashHacohen called on the government to “make it clear to the company [ Chevron] that... the Israeli public comes first.” She said this obligation is valid even when “large sums of money [ are] in the game.”
Former Joint List MK Dov Henin said that “the great looting is ongoing under the guise of the COVID- 19 crisis.”
The IEC appealed the decision to the Israel Competition Authority ( ICA) on Wednesday, demanding that it investigate Noble Energy, which was bought for $ 4.2 billion by Chevron.
The IEC claims it could lose up to $ 50 million in the upcoming year due to Chevron refusing to sell gas from Tamar at a reduced rate.
The letter to the ICA accused Noble Energy of “keeping the Israeli energy market as a hostage” with the goal of “totally suppressing competition in the natural gas market and boosting its own
profits.”
Noble Energy and Delek control 47% of Tamar, while other partners such as Isramco ( 28.75%) and Tamar Petroleum ( 16.75%) own parts of it as well. However, Noble Energy and Delek control 85% of the Leviathan gas field. This means that when the IEC is forced to buy gas from Leviathan to meet demands, these two companies make more money.
The IEC claimed in the letter that
Noble Energy is acting “as a bully” and expressed hope that the refusal to provide it with gas “isn’t the indication of the [ new] philosophy of doing business that came here with Chevron.”
The other partners in the Tamar gas field joined the IEC in appealing to the ICA for aid, citing that Noble Energy has a conflict of interest – due to it owning more shares in the Leviathan gas field than it does in Tamar.