Oil Refineries Ltd Reports Cancellation of One of its Gas Contracts
25 Apr, 2012, 03:49 ET
HAIFA, Israel, April 25, 2012 /PRNewswire/ --
Oil Refineries Ltd. (TASE: ORL.TA) ("Oil Refineries Ltd" or the "Company") Israel's largest integrated refining and petrochemical group, announced that further to sections 184.108.40.206, 220.127.116.11 and 18.104.22.168 of the Company's Periodic Report for 2011, it has been notified by East Mediterranean Gas S.A.E. ("EMG"), with which it has an agreement for the supply of natural gas, that on April 19, 2012, EMG received a letter in which Egyptian General Petroleum Corporation ("EGPC") and Egyptian Natural Gas Holding Company ("EGAS"), suppliers of natural gas to EMG ("the Gas Suppliers"), purport to cancel the gas supply agreement with EMG ("the Cancellation Notice"). EMG added in its letter to the Company that the Cancellation Notice is unlawful and in bad faith, and that it has demanded that the Gas Suppliers withdraw it; EMG promised to keep the Company apprised of any developments, and noted that its notice to the Company will not prejudice EMG's rights or factual allegations.
It is noted that owing to recurring sabotage of the gas pipelines from Egypt, the supply of gas by EMG to the Company has been constantly interrupted and irregular since it began, and that EMG has not supplied any natural gas to the Company since March 5, 2012.
As stated in the Company's reports, the Company has an agreement with another supplier of gas for its plants; however, even though the Company has two agreements for the supply of natural gas to its plants and those of its subsidiaries, at the date of this report the supply of natural gas needed for operation of its facilities is partial and irregular and the Company also uses liquid fuels, at significantly higher cost. The Company is working to exercise its legal rights towards the suppliers of natural gas with which it has agreements and in accordance with those agreements, and is reviewing its rights and possible courses of action vis-à-vis EMG in connection with the gas supply agreement with it.
For more details and partial effects of the supply of natural gas on the Company's ability to comply with the anti air pollution directives issued to it, see also Chapter A of the Company's Period Report for 2011 at the sections cited above. At the date of publication of this report and given the shortage of natural gas, the Ministry for Protection of the Environment has approved the Company's use of fuel oil, effective through May 18, 2012.
About Oil Refineries Ltd.
Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries in the Eastern Mediterranean area and integrates, on-site, petrochemical businesses. ORL runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 7.4, providing a variety of quality products used in industrial operation, transportation, private consumption, agriculture and infrastructure. Besides production of fuels, the company produces in its wholly owned subsidiaries Polymers (through Carmel Olefins Ltd), Aromatics (through Gadiv Petrochemical Industries Ltd), and Lube-Oils (through Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit http://www.orl.co.il.
ORL is controlled by the Israel Corporation Ltd. and Israel Petrochemical Enterprises Ltd., both public companies whose shares are traded on the Tel Aviv Stock Exchange.
The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's reports.
Chief Economist and Head of Investor Relations
Contact [email protected]
Investor Relations Contact:
Ehud Helft / Porat Saar
Tel: (US) +1-646-233-2161 / (Int.) +972-52-776-3687
SOURCE Oil Refineries Ltd
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