Delek Group (TASE: DLEKG, OTCQX: DGRLY) ("the Company") subsidiaries Delek Drilling L.P. and Avner Oil Exploration L.P. (together "the partnerships") published the following immediate report;
1. Engagements in agreements with the Oil Refineries Ltd.
On November 25, 2012 an Agreement was signed for the supply of natural gas between the partnerships and the other partners in the Tamar Holding (hereinafter - "the Sellers", and "the Tamar Project", respectively), and the Oil Refineries Ltd. (hereinafter - "ORL") according to which ORL will purchase natural gas from the Sellers for industrial operations and the operation of a power station and other installations of ORL in the Haifa Bay area (hereinafter - "the ORL Agreement").
According to the ORL Agreement the Sellers undertook to supply natural gas to ORL of a total of up to 5.8 BCM (billions of cubic meters) (hereinafter - "the Total Contract Quantity"), according to the terms as set forth in the Agreement.
The period of the ORL Agreement will start from the date of the start of the flow of gas from the Tamar Project and conclude at the end of 7 years or from the date on which ORL will consume the total contractual quantity, whichever earlier (hereinafter - "the ORL Agreement Period").
ORL has the right to extend the period of the Agreement for a period of up to an additional two years, or up to the date of consuming the Total Contract Quantity (whichever earlier).
ORL undertook to take or pay for the minimum annual quantity of gas to the extent and according to the mechanism set forth in the Agreement.
The Sellers undertook to act to increase the system's supply capacity for the handling and transmission of the Tamar Project through the establishment of additional facilities, including the use of the Yam Tethys Project's facilities and the Mary B reservoir in order to store the natural gas from the Tamar Project according to the levels and terms set forth in the ORL Agreement (hereinafter in this clause - "the Expansion Project"). Implementation of the Project's expansion is subject, inter alia, to receiving the approvals required by law under reasonable conditions to the satisfaction of the Sellers. The ORL Agreement determines that the supply of gas to ORL for the interim period starting from the date defined in the Agreement, up to the date of completing the Expansion Project, will be subject to the quantities of gas that will be available to the Sellers at that time, after the supply of gas to customers of the Yam Tethys Project and the other customers of the Tamar Project, according to the mechanism set forth in the ORL Agreement.
Source: Delek Group
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