Israel Electric Corp. (IEC), which even after the energy reform remains the country’s biggest electricity producer, has signed a memorandum of understanding (MoU) with some of the Tamar partners for the supply of natural gas to its power stations over the next 10 years. IEC said that the agreements in the MoU, “Reflect savings expected to amount to about NIS 800 million and up to NIS 1 billion, compared with the current Tamar agreement the existing alternatives.” However, this is not yet a final agreement, but only a non-binding MoU, and changes may occur before the final agreement is signed with the Tamar gas field partners.
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Over the next decade, IEC will purchase gas from Tamar worth $8.2 billion – between 2 and 3 billion cubic meters (BCM) each year. The agreement was signed with only some of the partners, in accordance with the principle of separate sales, which is designed to create competition in the gas market, even though the two largest reservoirs (Tamar and Leviathan) are both operated by US energy major Chevron. The IEC’s MoU was signed with most of the Tamar partners, with the exception of Tamar Petroleum and investments by SOCAR (the National Oil Company of Azerbaijan). But these partners are also in negotiations, and according to the IEC announcement, they will be able to join the agreements within 30 days.
Due to the IEC’s extensive production, its gas agreement is the largest gas agreement in Israel, and is also part of what makes the Tamar reservoir so oriented towards local production (72% for the domestic economy). This is in contrast to the Leviathan reservoir, which is export oriented (81% exports).
Published by Globes, Israel business news – en.globes.co.il – on July 27, 2025.
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