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Israel's Hadera Paper signs and amends natural gas purchasing agreement

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Israel's Hadera Paper signs and amends natural gas purchasing agreement

October 22, 2012 - 17:16
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HADERA, Israel, Oct. 17, 2012 (Press Release) -Pursuant to the immediate report of Hadera Paper Ltd. ("The Company"), dated January 26, 2012 (Reference Number: 2012-01-025389) and April 3, 2012 (Ref. No.: 2012-01-092523) and August 21, 2012 (Ref. No.: 2012-010215145) regarding the signing of an agreement for the purchase of natural gas between the Company and the partners in the Tamar Project ("Tamar" and "The Gas Agreement", respectively) and regarding the obtaining of an antitrust exemption from the Antitrust Authority, subject to the terms appearing in the decision of the Antitrust Supervisor, the Company is hereby honored to announce the following:

1. On October 17, 2012, an agreement was signed for the amendment of the gas agreement ("Amendment of the Gas Agreement"), pursuant to which it was agreed to amend several directives whose principal points are outlined below, with the intention - inter alia - to adapt the directives of the gas agreement to the decisions of the certified authorities.

2. As part of the Amendment of the Gas Agreement, it was agreed - inter alia - to amend the Take or Pay mechanism outlined in the agreement in such a manner as to grant the Company the option of reducing the minimal annual amount of natural gas that it has undertaken to purchase or pay for, to the effect that it shall not exceed 50% of the average annual quantity that the Company has actually consumed during the three years preceding the announcement concerning the exercise of the option, subject to adjustments as determined in the gas agreement and in the Amendment of the Gas Agreement. Upon the reducing the minimal annual quantity, the agreed-upon quantities set in the gas agreement will be accordingly reduced. The option may be exercised following notice by the Company, starting with the beginning of the fifth year since the initial provision of natural gas at commercial quantities to the Company ("Start of Commercial Operations") or on January 1, 2018 (the earlier of the two) and no later than the beginning of the eighth year since the Start of Commercial Operations, or December 31, 2020 (the later of the two).

3. Moreover, as part of the Amendment of the Gas Agreement, it was determined that the Company will be eligible to transfer or sell the natural gas that it purchases to third parties, at the volume and under the conditions stipulated in the Amendment of the Gas Agreement.

4. It should be noted that the Company has elected not to exercise the right granted to it by virtue of the Gas Agreement, pursuant to which it was eligible to reduce the annual quantity of natural gas purchased by the Company (as detailed in the immediate report of the Company dated January 26, 2012), and that this decision not to exercise said rights does not prejudice the rights of the Company, as detailed in Section 2 of this report.

5. The signing of the Amendment of the Gas Agreement signifies that all of the preconditions have been met for the gas agreement to enter into effect.