Specialist chemicals company ICL has signed a non-binding memorandum of understanding (MoU) with Energean Israel for a long-term supply of natural gas for a total consideration of nearly $2bn.

Under the MoU, ICL will enter negotiations with Energean for a definitive agreement regarding the supply of 13 billion cubic metres of natural gas.

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The gas will be supplied to ICL following the commencement of production from Energean’s Karish and Tanin fields located offshore Israel.

A definitive agreement with Energean is subject to securing required approvals and arrangements for access to sufficient alternate sources of gas in the event that Energean fails to develop the offshore fields.

"The non-binding MoU we have signed with Energean for the long-term supply of natural gas is meant to meet all of our energy needs."

ICL will use the natural gas for its power stations and facilities in Israel.

ICL acting CEO Asher Grinbaum said: “The non-binding MoU we have signed with Energean for the long-term supply of natural gas is meant to meet all of our energy needs, including the operation of our new, large 240MW power plant in Sdom, which is expected to become operative toward the end of the year.

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“ICL is already one of Israel’s largest users of natural gas, and this agreement is in line with our concerted efforts over the past several years to switch to clean energy sources to power all of our production facilities in order to reduce pollutants and preserve the environment.”

Together, Karish and Tanin fields have 2.7 trillion cubic feet of natural gas and 41 million barrels of oil equivalent (mmboe) of light hydrocarbon liquids, totalling 531mmboe of 2C resources.