Tel-Aviv-Israel Chemicals Ltd. said March 25 that it has signed an agreement with Yam Tethys Partners setting the terms under which it will purchase approximately 2 billion cubic meters of natural gas to be supplied through 2015 (with adjustments). This quantity is based upon the company’s projected needs through 2015, including the manufacturing capacity expansion called for in its multi-year strategic plan. The total value of the deal is estimated to range from $260-$330 million, depending primarily upon the price of fuel oil and the exact quantity and rate of the company’s natural gas consumption. The conversion of most of ICL’s Israel operations to natural gas is expected to give rise to cost savings of more than $100 million per year. ICL, which is ready to discontinue the usage of fuel oil and gasoline in a large proportion of its manufacturing facilities, is becoming Israel’s first major corporation to convert to natural gas.
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