Dalia Energy Files London Arbitration Against Leviathan Partners Over $6.7B Deal
Dalia Energy has filed for London arbitration against NewMed and Ratio over the cancellation of a $6.7 billion Leviathan natural gas supply agreement for its new power plants.
Dalia Energy Company announced that it has filed a request with the London Court of International Arbitration (LCIA) against the Leviathan reservoir partnerships, NewMed Energy and Ratio, demanding validation of the massive natural gas supply agreement. Despite the cancellation notice issued by NewMed and Ratio, Dalia is pushing forward with the multi-billion-dollar dispute.
The $6.7 Billion Gas Agreement Dispute
The contested agreement involves supplying natural gas from the Leviathan reservoir to two power plants currently being developed by Dalia, with deliveries scheduled to run from 2030 to 2050. The total value of the gas supply is estimated at approximately $6.7 billion. This landmark contract represents the first-ever "separate sale" arrangement in the Israeli market, where two of the Leviathan partners—NewMed and Ratio—signed the sale independently, while the third partner, Chevron, remained outside the deal.
However, in late September, the sellers announced the cancellation of the agreement. The official justification cited the "non-fulfillment of all precedent conditions," specifically arguing that the necessary approval from the Competition Authority was granted too late, exceeding the 90-day window stipulated in the contract. A core legal disagreement persists between the parties regarding the exact starting date of this 90-day countdown.
Arbitration Process and Energy Sector Impact
Energy sector experts suggest that the real motivations behind the cancellation may differ, potentially driven by a desire to renegotiate terms or secure short-term agreements that favor NewMed and Ratio. The upcoming arbitration in London will be conducted before a panel of three arbitrators: one chosen by Dalia, one by NewMed and Ratio, and the third appointed by the first two. This complex legal proceeding is expected to take at least a year.
The disputed gas is designated for two new power facilities: the Eshkol site in Ashdod and the Tzafit site, each boasting an 850-megawatt capacity. The total construction cost for both plants is slated to reach roughly 10 billion NIS. Dalia has already secured financial closures with Bank Hapoalim for the Eshkol station, and with Bank Leumi and Israel Discount Bank for the Tzafit station, with both plants scheduled for commercial operation by July 2029.
