Avner Oil - Annual Report 2011 - Delek Energy Systems

AVNER OIL EXPLORATION (LIMITED PARTNERSHIP)NOTES TO THE FINANCIAL STATEMENTSNote 12 – Commitments, Contingent Liabilities, and Liens (Continued):Said estimates in respect of the overall financial consideration of the agreement, the volume of natural gas that will bebought, and beginning of supply, are not absolutely certain, in whole or in part, and may be realized in the mannersignificantly different because of various factors including noncompliance with contingent terms, in whole or in part,changes in the volume, rate and timing of demand for natural gas by Israel Electric, exercise of the option by IsraelElectric and the dates of exercise (if any), the price of gas that will be fixed as provided by the supply agreement,linkage to the US Price Index, etc.B. After reporting date, a number of agreements were signed for the dale of natural gas, as follows:1. Gas Supply Agreement with Dalia Power Energies Ltd.:On January 8, 2012 (after reporting date), an agreement for the supply of natural gas was signed with Dalia PowerEnergies Ltd. ("Dalia"), under which Dalia will purchase a volume of natural gas, for the purpose of operating a powerstation which it plans to construct ("supply agreement"), of up to 1.38 BCM each year, over a period of 17 years.2. Natural Gas Supply Agreements with Ramat Negev Energy Ltd., and Ashdod Energy Ltd.:On January 9, 2012 (after reporting date) two agreements for the supply of natural gas were signed – one with RamatNegev Energy Ltd., and the second with Ashdod Energy Ltd. The supply agreements are for a cumulative supply of upto 0.33 BCM per year, over a period of 16 years.3. Natural Gas Supply Agreement with Hadera Paper Mills Ltd.:On January 25, 2012 (after reporting date), an agreement for the supply of natural gas was signed with Hadera PaperMills Ltd. ("Hadera Paper", or "buyer"), under which Hadera Paper will acquire natural gas from the natural gasproject's participants, for operation of various installations of the buyer located in Hadera, and for an additional powerstation of the buyer located in Hadera, when and if it will be constructed ("supply agreement), of up to 3.3 BCM over aperiod of 15 years.4. Natural Gas Supply Agreement for the Sale of Natural Gas with Mashav Initiating and Development Ltd.:On February 9, 2012 (after reporting date) an agreement for the supply of natural gas was signed with Mashav Initiatingand Development Ltd., a company under the control of Clal Industries Ltd. (“Mashav”), and, accordingly, Mashav willpurchase natural gas for the operation of its Ramle installations and for the expansion of its Ramle power station, ifsaid will be expanded, for 0.2 BCM of natural gas, each year for a period of 15 years.The supply agreements includes a number of conditional terms, primarily – project development financing vis a vissome of the "Tamar" project partners, approval by the Public Services Authority-Electricity, and approval by theRestrictive Trade Practices Authority (if said will be required). Terms for amending the contractual volumes and supplyterms were also included.3. Memorandum of Principles - Undertakings for the Supply of Natural Gas:Memorandum of Principles with Daewoo Shipbuilding and Marine Engineering Co. Ltd. and D & H Solutions AS:,A. On November 22, 2011, a memorandum of principles was signed between Daewoo Shipbuilding & MarineEngineering Co. Ltd., D & H Solutions AS, ("buyers") and partners of the "Tamar" and "Dalit" project, with the mainpoints as follows:Said memorandum is in respect of an undertaking for the sale of natural gas to the buyers by "Tamar" project partners,for liquefaction to liquefied natural gas ("LNG") and export to South Korea and/or other countries, exact details ofwhich will be finalized between the parties. The liquefaction of the natural gas is planned by the buyers using a FloatingLiquefied Natural Gas facility ("FLNG") to be constructed and financed by the buyers and positioned in the "Tamar"and/or "Dalit" gas fields, and from there to be transported by special tankers to the target markets.-11-