Leviathan Gas Deal Gains Regulatory Backing for Two Israeli Power Plants
Israel's Competition Authority has approved the core terms of a gas agreement valued at an estimated $6.7 billion, supporting plans for 1,700 megawatts of new electricity capacity. A dispute over the sellers' earlier cancellation notice remains part of the picture.
Israel's Competition Authority has given regulatory backing to a major domestic gas supply agreement between Dalia Energy and Leviathan partners NewMed Energy and Ratio Energies, according to Israeli business reports published on October 6.
The arrangement would supply two new power generation units in Ashdod and at Tel Tzafit. It connects Israel's offshore gas resources with investment in domestic electricity production, a practical link between resource development and future energy supply.
But the decision comes after NewMed and Ratio notified Dalia that they were cancelling the agreement. Dalia rejected that notice. Regulatory approval is therefore a significant development without, by itself, proving that every contractual and financing issue has been resolved.
Two generating units, with supply planned from 2030
The contract was signed on May 19, 2026. The latest development concerns competition clearance, not the signing of another agreement.
NewMed's original disclosure, republished by MarketScreener, describes two combined cycle generating units, each with approximately 850 megawatts of capacity. One is planned at the Eshkol power station site in Ashdod; the other is at Tzafit. Together, their stated capacity is approximately 1,700 megawatts.
The agreed supply schedule envisages deliveries beginning on January 1, 2030. Initial annual quantities would be about 1.3 billion cubic metres, increasing later to approximately 1.7 billion cubic metres. The contract term runs to the twentieth anniversary of the facilities' commercial operation, subject to its termination provisions.
The $6.7 billion figure is an estimate of revenue over the agreement's lifetime. It is not an immediate payment, and actual receipts depend on deliveries and the contract's pricing arrangements.
Why the regulator accepted the main terms
Calcalist reported that Competition Commissioner Michal Cohen concluded the principal arrangement was not expected to cause significant harm to competition. The authority accepted the long duration and the requirement for Dalia to purchase a minimum quantity of gas or pay for it.
These commitments matter to project financing. They can give the electricity producer greater certainty about fuel availability while providing the gas sellers with a clearer picture of future demand. That predictability helps underpin investment in facilities intended to operate for decades.
The agreement also separates two Leviathan partners from the field's operator. NewMed and Ratio are the sellers; Chevron is not a party to this supply contract. Globes highlighted that structure as a potentially important development for competition between reservoir partners.
What the approval does not settle
Calcalist and Walla reported that the exemption did not extend to one restriction on Dalia's onward sale of gas to third parties. Walla said the parties were left to assess that provision under the applicable exemption rules. This qualification matters when describing the scope of the decision.
There is also the cancellation dispute. Reporting in late September said the sellers cited unmet conditions, while Dalia maintained that their notice was invalid. The approval should not be described as a confirmed withdrawal of that notice.
For Israel's electricity sector, the decision supports a substantial route from domestic gas production to additional generating capacity. Delivering that capacity still requires the projects and supply arrangements to proceed. It does not mean the new units are operating today, or establish that household electricity bills will fall.
