Competition Commissioner Michal Cohen has decided to grant an exemption from restrictive arrangement approval for the natural gas sale agreement between Dalia Power Energies Ltd. and two of the partners in the Leviathan gas field, NewMed Energy and Ratio Energies. The decision was reached following consultation with the Exemptions and Mergers Committee, based on the determination that the arrangement would not significantly harm competition in the relevant markets and that its primary purpose is not to reduce or prevent competition.
The approval was granted unconditionally, though the commissioner refrained from approving a single restraint regarding secondary trading restrictions, referring the parties to self-assess its compliance with the block exemption conditions set by law.
The agreement, signed on May 19, 2026, covers the supply of natural gas from the Leviathan reservoir for two new combined-cycle power generation facilities (with a capacity of approximately 850 megawatts each) to be built by subsidiaries controlled by Dalia: At the Eshkol power station site in Ashdod (Eshkol Avshal Energies Ltd.) and at the Tzafit power station site (Dalia Energies Expansion Ltd.). Gas supply is expected to begin on January 1, 2030, and end on the 20th anniversary of the commercial operation date of the new units. According to the parties' estimates, the total volume of gas procurement under the agreement is expected to reach approximately $6.7 billion.
Under the terms of supply and quantities, NewMed (which holds 45.34% of Leviathan) and Ratio (which holds 15%) undertake to supply gas on a firm basis in a cumulative annual volume of approximately 1.3 BCM. Starting from a date to be set between January 1, 2034, and July 1, 2035, until the end of the agreement term, daily quantities will be increased so that the cumulative annual volume reaches approximately 1.7 BCM. In return, Dalia undertook to purchase or pay for a minimum annual quantity (Take or Pay - TOP) calculated from the adjusted annual quantity. The gas price is based on an indexation mechanism tied to the general electricity tariff, largely matching the commitments of the Leviathan rights holders that accompanied the export approval from December 17, 2025.
The agreement includes price update and quantity reduction mechanisms. Starting October 1, 2041, and for a period of 90 days, either party may request a price review, with the update capped at an increase or decrease of up to 10%. Should the parties fail to agree on an updated price, the requesting party will be entitled to reduce the daily contractual quantity by up to 30%. Furthermore, Dalia was granted an option to update the price mechanism for gas supplied to the existing steam units at the Eshkol site (from the Eshkol 1 agreement of May 2024), so that the gas price in that agreement will be calculated according to the mechanism applicable to the combined cycle, solely in relation to the shares of NewMed and Ratio.
In her competitive analysis, the commissioner noted that Israel's natural gas supply market is concentrated and characterized by a small number of players. The Leviathan field holds the largest gas reserves (approximately 572 BCM as of late 2025, according to the partnership's estimate), compared to the Tamar field (approximately 271 BCM) and the Karish-Tanin fields (approximately 126 BCM). In 2025, Leviathan supplied about 12% of total gas consumption in Israel, Tamar 47%, and Karish 8.41%. According to Gas Authority forecasts, cumulative domestic gas consumption through 2048 is expected to reach between 464 and 553 BCM, with the central scenario of the Dayan Committee assuming demand of 515 BCM. The power generation sector accounts for roughly 79% of total gas consumption in the domestic economy.
Regarding competition concerns, the commissioner clarified that long-term agreements and TOP clauses create stability and project financing, but may create practical exclusivity and block entry for new players. However, this concern is mitigated in this instance in light of future quantity reduction mechanisms and expected demand growth in the market. Regarding the secondary trading restriction clause, which restricts Dalia from selling gas to third parties, NewMed referred in its response to a notice of agreement termination dated September 25, 2026, but without requesting the withdrawal of the exemption application. Due to the urgency of the decision, the commissioner did not grant absolute validity to this clause, leaving the evaluation of its legality to the responsibility of the parties.