The board of the Israel Electric Corporation today approved a management proposal to conduct negotiations with the Tethys Sea oil exploration group in an effort to purchase 1.7 billion cubic meters to 1.8 billion cubic meters of natural gas a year. The gas will be used to supply power stations.

IEC Chairman Eli Landau and CEO Jacob Razon said that they believe the company should acquire a significant volume of its gas from Israeli sources, as it is of top economic and strategic importance to both the State of Israel, and the company.

It is believed that the IEC will offer Tethys the same conditions it has offered to the Egyptian group EMG, a private company controlled by the Egyptian government and Merhav, an Israeli company headed by Israeli businessman Yossi Maiman. The IEC has been holding advanced negotiations with the Egyptian group.

The Tethys Sea partnership consists of the American oil-exploration company Samedan and the Israeli oil-exploration partnerships Avner and Delek Drilling, which trade on the Tel Aviv Stock Exchange and are controlled by Israeli businessman Yitzhak Tshuva.

TST Recommends

At the end of January this year, the IEC board approved entering into negotiations with EMG to acquire 1.7 billion cubic meters of gas in a long-term agreement. Meanwhile, the board gave its approval to hold negotiations for the purpose of acquiring additional gas from one of the other providers that participated in the IEC's tender.

In the course of the negotiations, the Tethys Sea group announced that its gas comes from Israeli sources and is estimated at 33 billion cubic meters to 44 billion cubic meters.