Israel Natural Gas Lines Ltd. (INGL)

Israel Natural Gas Lines Ltd. (“INGL”) is a government owned corporation, established in 2003 for the purpose of constructing and operating the national natural gas transmission infrastructure. In 2004, the Minister of Energy awarded INGL a license for this purpose, under the Natural Gas Market Law, for a period of 30 years. This national project is of extreme importance for Israel for two main reasons – first, its impact on Israel’s economy and industry, and second, its contribution to improvement of environmental quality and reduction of air pollution. INGL adheres to stringent international standards in its construction and operations, and makes use of sophisticated logistic tools, advanced technologies and a wide range of international and local professional suppliers, contractors and consultants. INGL currently has 150 employees involved in planning, engineering, construction, operations, maintenance, safety, finance, business development, law and management.

Significant Savings for the Economy and Cleaner Air

The natural gas that INGL transports is one of the lowest cost energy sources available to the Israeli economy, and its use significantly reduces the costs of generating electricity and energy for industrial needs. From its establishment to the present, the company has invested more than NIS 8 billion in the system’s construction, saving the Israeli economy billions of NIS per year. Energy produced from natural gas is cleaner than other fuels such as diesel oil, fuel oil and coal, emitting fewer pollutants and greenhouse gases during combustion.

Natural Gas Pipelines Throughout Israel

Besides pipeline, the natural gas transmission includes several important facilities, including: • Stations in Ashdod and Dor for receiving natural gas from offshore suppliers in Israel’s maritime territory such as Tamar, Leviatan and Enrgean • A deep water LNG receiving terminal and mooring system to receive natural gas from floating storage and regasification vessels, located approximately 10 kilometers west of Hadera’s coastline, and connected through an offshore line to the national transmission system • Under-ground pipelines for transporting high pressure natural gas across the length and the breadth of Israel. To date, INGL has laid about 830 km of high-pressure pipelines, all over the country as detailed below: The Offshore Section, in operation since May 2006; the Central Section, in operation since May 2007; the Southern Section, in operation since November 2009; the Northern Section, in operation since April 2011; Dovrat-Ziporit Section, in operation since January 2015; Palmahim Section, in operation since February 2016; A southern export line to Jordan, in operation since January 2017; Eastern pipeline, in operation since May 17; the Jerusalem Pipeline in operation since April 2021; and an export pipeline to northern Jordan (active since December 2019) • PRMS stations to reduce pressure and meter gas deliveries, located at consumer and distribution company delivery points • Block valve stations throughout the system • Facilities for operations and security, to monitor and control the network • Maintenance and logistics centers at several locations nationwide.

INGL Customers

Already, about 70% of Israel’s electricity is generated using natural gas, which INGL delivers to 7 large power stations owned by IEC, and to independent power producers such as Dorad, Dalia, OPC (Rotem and Hadera), Edektech (Ramat Negev Energy, Ashdod Energy), Orot Yosef, Rapac (Sorek, Ashkelon, Alon Tavor, Ramat Gavriel), IPM Beer Tuvia, Alon Energy Centers, Tzomet power station and MRC power station. In addition, INGL delivers natural gas to large industrial plants in Israel, including in the Haifa Bay area, Hadera, Ramat Hovav, Mishor Rotem, and other locations throughout the country (Industrial customers include ORL, Haifa Chemicals, Adama-Makhteshim, Adama-Agan, Dead Sea Works, Mashab, Tnuva, Nilit etc.). The number of users continues to grow by the connection to natural gas new private power plants, converted coal stations, new industrial clients and significant export to Jordan and Egypt.

INGL Develops the Natural Gas Economy

Following the discovery of significant volumes of natural gas resources off the coast of Israel, the demand for electricity generation based on natural gas, and gas sector continual development, has increased. INGL continues to develop the natural gas sector, increasing the reliability and efficiency of the national transmission system, to ensure a regular supply of gas to its customers. The company is working on the construction of new gas transmission segments and facilities of significant volumes, including doubling the pipelines in the North and the South as well as an underwater pipeline and subsea valve station (10 km from Dor Beach), which will enable the direct offshore connection of additional gas suppliers to the transmission system.

Converting Coal-Based Units to Natural Gas

According to the Ministry of Energy’s plan to weaning Israel off of polluting fuels, the project for converting the coal-based units into natural gas units was launched. According to the plan, the project will include the conversion, by the years 2024-25, of four units in the Ashkelon coal-based power plant (the Rotenberg Plant, about 2,250 MW) and two units in Hadera (Orot Rabin Power Plant, about 1,150 MW). INGL has completed of the connection for the first converted unit in Rotenberg in 2022. In addition, the company completed the natural gas connection for the combined-cycle gas turbines 70 and 80 in Orot Rabin (about 1,260 MW) which would replace coal units 1-4.

Exporting Natural Gas

The company promotes the export of natural gas as a significant growth engine and as a strategic arm for Israel while strengthening the company’s significant contribution to strengthening geopolitical ties and increasing state revenues.
In 2017-19, INGL completed the construction of two export pipelines to Jordan, at the South of the Dead Sea region for Jordanian industrial plants and in the Bet Shean region connecting the Israeli transmission system to the Jordanian transmission system. Currently, most of Jordan’s electricity is produced by Israeli-sourced natural gas. In January 2020, INGL started to transmit natural gas to the EMG pipe near Ashkelon for the purpose of exporting natural gas to Egypt. These days, the construction of the pipeline is in progress. In January 2021, the company signed a long-term agreement with Nobel Energy to establish an offshore pipeline from Ashdod to Ashkelon and increase the natural gas export to Egypt via the EMG pipeline.

Bonds Issuance and Credit Rating

On May 30th, 2018, INGL published a prospectus for listing bonds (Series D) and was listed on the primary list of the TASE from June 7th, 2018. The company is ranked ilAA+/Positive by Ma’alot S&P. The company’s bonds are ranked ilAA+ by Ma’alot, and Aa1.il stable forecasts by Midroog.

INGL Looks to the Future

INGL is a relatively young company, and since its inception it has succeeded in making significant changes in Israel’s energy economy. Through its vision, management team and professional staff, it has established a national transmission infrastructure to deliver natural gas across the length and the breadth of Israel. INGL continues to look forward with the hope and belief that natural gas will continue to make an important contribution to Israel’s economy, to its energetic independence, and to provide cleaner air for its people.