Sonia Gorodeisky
The Israel Electric Corp. and private electricity producers are counting the cost of the six day halt in natural gas supplies.
After being shut down for six days, the supply of natural gas from the Tamar reservoir was resumed this morning, and the platform's normal activity is taking place, the Tamar partnership announced today.
The reservoir is currently supplying half of the maximum amount it produces at normal times. The amount of gas flowing from the platform to the shore will be increased gradually over the next 24 hours until it reaches the maximum amount, while maintenance work is continuing at the same time.
Last Thursday, with the beginning of planned maintenance work on the Tamar reservoir, a malfunction occurred that caused a shutdown of the platform and a halt in the flow of gas to the economy. A crack was discovered in one of the pipes connected to the ventilation pipe, requiring a shutdown of the platform pending a complete repair of the malfunction. The option of soldering the crack was considered, but Noble Energy decided to replace the entire damaged part, a safer, but lengthier, option. The cracked part was specially produced in Houston, Texas and flown to Israel.
Tamar partnership sources said, "Last week again highlights to need to encourage multiple energy sources and the importance of developing additional natural gas reservoirs to provide a safety cushion and energy redundancy for the Israeli economy."
Still unanswered is the question of how much damage has been caused to the economy as a result of the platform being shut down for six days, and who will bear the cost. During the shutdown, the power plants of Israel Electric Corporation (IEC) (TASE: ELEC.B22) and the private producers switched to the use of diesel fuel, which made their basket of fuel significantly more expensive. It is estimated that every day of using alternative fuel cost IEC tens of millions of shekels.
IEC's view is that the public should not have to bear the cost of the repair, and the Public Utilities Authority (electricity), which sets the electricity rate, announced this week that the question of obtaining compensation from the partnership for failure to supply gas will be considered.
The probe will be a lengthy one, and will not be completed before the electricity bills for September-October are issued, meaning that the public will not see the gas crisis in their upcoming electricity bills, which will be calculated according to the current rate. The Public Utilities Authority, however, will have to find other resources to cover the cost of the fuel basket during the crisis.
Meanwhile, the Tamar partnership quickly informed its customers that the event was force majeure - a legal term exempting the partnership from providing compensation to its customers.
Published by Globes [online], Israel Business News - on September 27, 2017 - © Copyright of Globes Publisher Itonut (1983) Ltd. 2017
