TEL AVIV, Israel, December 13, 2010 /PRNewswire-FirstCall/ -- ICL (TASE:ICL), a multinational fertilizer and specialty chemicals company, today announced that it has signed an agreement under which EMG will supply natural gas to ICL's manufacturing plants through the year 2030. This agreement is in addition to the gas purchase agreement that ICL signed with the Yam Tethys group in 2008 and following the connection of its facilities to Israel's natural gas pipeline in December 2009.
This multi-year agreement secures the supply of natural gas to the Company's manufacturing plants that transitioned last year to the use of natural gas as their primary source of energy, a process that has led to a significant improvement in the environmental profile of the Company's manufacturing operations. This is an expression of a comprehensive environmental protection strategy through which ICL has committed itself to comply fully with the strictest environmental standards, while in many cases going Beyond Compliance.
ICL has agreed to purchase from EMG approximately 0.2 BCM of natural gas per year, a quantity which it will use to run a power plant which it may build in Sdom. In addition, ICL has secured an option until March 31, 2011 to purchase an additional 0.53 BCM per year, a quantity that will be used for the Company's manufacturing plants as well as by the new power plant. The purchase of gas for the new power plant is dependent upon the Company making a decision to build the power plant and upon the receipt of required building permits. These conditions are to be met by June 2012.
The projected monetary value of the agreement through 2030 (net of options) is approximately $370 to $460 million. The calculation of this estimate utilizes current electricity prices and the "floor" and "ceiling" prices stipulated in the agreement.
Commenting on the news, Mr. Dani Chen, CEO of ICL Fertilizers, said, "The transition to natural gas that we have carried out during the past year has delivered a significant improvement in our environmental profile as well as a material reduction in our energy expenses. We are very pleased to sign this multi-year agreement, which assures the continuity of our operations as we continue growing our business."
ICL is one of the world's leading fertilizer and specialty chemicals companies. For a world challenged by population growth and scarce resources, ICL makes products that increase global food and water supplies and improve industrial materials and processes.
ICL produces approximately a third of the world's bromine and is the 6th largest potash producer in the world. ICL is a leading supplier of fertilizers in Europe and a major player in specialty fertilizer market segments. One of the world's most integrated manufacturers and suppliers of phosphate products, ICL has become the world's leading provider of pure phosphoric acid and a major specialty phosphate player.
ICL is comprised of three core segments: ICL Fertilizers, ICL Industrial Products and ICL Performance Products. Its major production activities are located in Israel, Europe, the US, South America and China, and are supported by major global marketing and logistics networks. ICL benefits from exclusive concessions to extract minerals from Israel's Dead Sea, a vast source of high-quality and low-cost potash, bromine, magnesium chloride and sodium chloride. ICL also mines phosphate rock from Israel's Negev Desert and potash and salt from its mines in Spain and the UK.
ICL's shares are traded on the Tel Aviv Stock Exchange (TASE: ICL).
Forward Looking Statement
This press release contains forward-looking assessments and judgments regarding macro-economic conditions and the Group's markets, and there is no certainty as to whether, when and/or at what rate these projections will materialize. Management's projections are likely to change in light of market fluctuations, especially in ICL's manufacturing locations and target markets. In addition, ICL is likely to be affected by changes in the demand and price environment for its products as well as the cost of shipping and energy, whether caused by actions of governments, manufacturers or consumers. ICL can also be affected by changes in the capital markets, including fluctuations in currency exchange rates, credit availability, interest rates, etc.
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SOURCE ICL Ltd