Delek Group Ltd. (DLEKG), the holding company that owns stakes in Israel’s two largest natural gas fields, advanced to the highest in seven weeks after a gas export deal was signed with Jordan.
The shares of the company, whose interests include the offshore Tamar and Leviathan fields, climbed 3.5 percent to 1,379 shekels, the highest since July 17, at the close in Tel Aviv. Volume was 1.7 times the three-month daily average, with the stock posting the second biggest gain by percentage and index points on the benchmark TA-25 Index (TA-25), which increased 0.2 percent.
Partners in the Leviathan field signed a memorandum of understanding to provide gas to Jordan for 15 years, Israeli Energy Minister Silvan Shalom said in an e-mailed statement. Gas will start flowing by the end of 2017 at a cost of $15 billion, said Jordanian Minister of Energy and Mineral Resources Mohammad Hamed in a phone interview today.
“In order to develop the Leviathan field, the gas partners needed a market,” Guil Bashan, an analyst for IBI-Israel Brokerage & Investments Ltd. in Tel Aviv, said by telephone. “This deal is that critical mass. Tamar already supplies gas domestically but Israel’s market isn’t big enough for Leviathan. Now the partners can show a clear, concrete plan to banks and investors.”
Israel has discovered enough natural gas under the Mediterranean to supply the country for decades while also allowing for exports. Tamar started production in March 2013. Leviathan, at almost twice the size, is scheduled start in 2016.
Delek Group’s shares have advanced 4 percent this year compared with a 6.9 percent rise in the benchmark gauge as the the group has sold non-energy assets to focus on its oil and gas business.
The Netanya, Israel-based company owns stakes in the fields via its holdings in Delek Drilling-LP (DEDRL) and Avner Oil Exploration LLP. (AVNRL) Avner rose 3.6 percent and Delek Drilling gained 3.1 percent.
To contact the editors responsible for this story: Samuel Potter at email@example.com Dana El Baltaji