The Palestine Power Generation Company (PPGC) has cancelled a deal to buy about $1.2 billion of natural gas from the Leviathan field off the coast of Israel, citing delays in development of the giant project.
Development of Leviathan has been thrown into doubt after Israel’s anti-trust authority recommended in December the break-up of what it says is monopoly control of the country’s offshore gas reserves by Noble Energy and Delek Group , which hold 85 percent of Leviathan.
In 2014, PPGC signed a 20-year deal to buy up to 4.75 billion cubic meters (bcm) of gas once Leviathan starts production later in the decade.
PPGC said certain conditions had not been met, including securing approval from the anti-trust authority as well as other regulatory approvals. It also cited delays in development of the project, Delek Drilling, a partner in the field, said.
The cancellation will take effect in 30 days unless anti-trust approval is secured before then, Delek said.
PPGC aims to build a $300 million gas-fired power plant in Jenin in the Palestinian Authority. The Palestine Development and Investment Inc. holds an 18 percent stake in the PPGC.