05.07.2009

The government of Israel determined on 26 December 2004, that Oil Refineries Ltd. (“ORL”) will be privatized by way of splitting the oil refineries into two companies, so that a subsidiary of ORL named Oil Refinery – Ashdod Ltd. (“ORA”) will be established and all it’s shares will be sold, by private sale, as one block. The refinery which was founded in 1972 was thus privatized on September 27, 2006 for 3.25 billion shekels and became a subsidiary of Paz Oil Company Ltd.

The company refines the crude oil into a variety of products which are used in power generation, industrial operations, transportation, the defense establishment and private consumption. The Ashdod Oil Refinery is the first industrial plant to use natural gas in its refining process instead of crude oil as of October 2005. YT and Paz – on 3.9.2004 YT signed an agreement with the Paz Oil Refinery for the total supply of 1.3 bcm of gas over a ten year period or until Paz consumes the total quantity, whichever comes first. The total value of this contract (100%) is about $120 million. Paz completed in March 2009 the construction of a 45 MW cogeneration IPP which will supply all the steam needs and all the electricity needs (25 MW) of the refinery. The remainder electricity will be sold to to the grid or to end consumers. In July 2009 Paz IPP entered into an agreement to supply all of Numonyx’s electricity needs for its factory in Kiryat Gas. Numonyx is owned by Intel (45.1%), the Swiss company ST Microelectronics (48.6%) and the private equity investment company Francisco Partners (6.3%).

In September 2009, Paz launched a second IPP at the Ashdod Oil Refinery, namely a 60 MW cogeneration IPP within the refinery compound. The refinery will consume itself 40 tonsper hour of steam generated from the station. The cost of construction of the IPP is about 200 million shekels. The IPP will be cooled with purified water constructed at the cost of 70 million shekels and the power generated is to be sold to private consumers.

The first station started operations at the end of 2009 and is a 45 MW cogenerations IPPs. The power is used 55% by the Oil Refinery and the rest 45% is sold to Numonix. The steam capacity production is 52 tons of steam an hour which is consumed by the Oil Refinery in Ashdod. The cost of setting up the station was $30-$40 million.

The second station is to start operations at the end of 2012 and is to be a 60 MW cogen. The steam is to be consumed by the Oil Refinery and the electricity is to be sold to private consumers. Cost of set up is $60-70 million

16.5.2011 – The Paz Group that has an IPP at their Oil Refinery in Ashdod has signed a PPA t o sell 1 MW of electricity for 4 years for a total of 10 million shekels to the Beit Levinstein Hospital with sales starting next month at a tariff lower than that of IEC.

Gina Cohen
Natural Gas Expert
Phone:
972-54-4203480
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