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Oil Refineries entered into a contractual agreement with the Tamar Partnership for the purchase of natural gas

Wednesday, Nov 28, 2012

Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter " the C ompany, " " ORL " ), Israel's largest integrated refining and petrochemical group, announced that on November 25, 2012 it entered into a contractual agreement ("the Agreement") with the Tamar Partnership (Noble Energy Mediterranean Ltd., Isramco Negev 2 LP, Avner Oil Exploration LP, Delek Drilling LP, Dor Gas Exploration LP) for the purchase of natural gas, which will serve as an energy source and raw material for the Oil Refineries and its subsidiaries: Carmel Olefins Ltd, Gadiv Petrochemical Industries Ltd and Haifa Basic Oils Ltd.

The Agreement includes additional agreements usual in agreements of this type, including: Undertaking of the Company to take or pay for the minimum annual amount of gas in an amount and in accordance with the arrangements stipulated in the Agreement, compensation mechanisms for short deliveries, quality of the gas, liability limitations, arbitration mechanism and others.

At the same time, pursuant to discussions between the parties, on November 25, 2012 a compromise agreement was signed between the Tethys Sea Partnership and the Company, whereby the parties agreed as follows ("the Compromise Agreement").

In the Compromise Agreement the Company confirmed that it does not disagree with the argument by the Tethys Sea Partnership that the reduction in supply from January 2012 was due to force majeure.

From August 2012 the Company shall only pay for gas actually supplied and not in accordance with the monthly payments stipulated in the Tethys Sea Agreement.

About Oil Refineries Ltd.

Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries in the Eastern Mediterranean area and integrates, on-site, petrochemical businesses. ORL runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 7.4, providing a variety of quality products used in industrial operation, transportation, private consumption, agriculture and infrastructure.

Besides production of fuels, the company produces in its wholly owned subsidiaries Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lube-Oils (through Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit http://www.orl.co.il.

Source: Oil Refineries Ltd.

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