Did Natural Gas Companies Secretly Buy Land in Acre?

An unknown group called Contec Medical Vision offered to buy the land from the liquidator a few months ago; real estate market sources claim land is ideal for gas company to build underwater pipeline from offshore reserve to onshore holding facility.

Are the partners in the Tamar natural gas field planning to bring the gas ashore via a pipeline to Acre? A plot of land that would perfectly suit their needs was recently purchased south of the city, leading sources in the real estate sector to speculate that the partners are behind the move.

The 430-dunam plot was on the market for seven years, but it had no buyers. It had been occupied by Electrochemical Industries, which went bankrupt in 2003. Since then, the company's property has been in protracted liquidation.

Attorney Nehama Sneh - Yaron Kaminsky - July 10 2011
Yaron Kaminsky

The factory left the land polluted with heavy chemicals including mercury, but the Acre municipality had hoped to clean it up so that a boardwalk and hotels could be built there. Yet such a cleanup project is expensive, and no buyers were found.

That is, until a few months ago. An unknown group called Contec Medical Vision offered to buy the land immediately from the liquidator. Real estate market sources presume the group is interested in the land because it includes a narrow strip of coast - just what a gas company would need to build an undersea pipeline from an offshore reserve to an onshore holding facility.

The Tamar partners, Noble Energy and Delek Energy, had intended to build such a structure farther south, on the Dor beach, but were forced to abandon their plans a year ago due to pressure from area residents.

As word spread that the gas companies might be behind the bid, the liquidator asked another group of investors to bid on the land as well. Yet it quickly signed a deal with Contec, which agreed to pay NIS 43 million for the land parcel and to take on NIS 70 million of Electrochemical Industries' debt. So far, Contec has given the liquidator a NIS 12.9 million down payment.

Contec's registered owner is Attorney Nehama Sneh, the chairwoman of the Trans-Israel Highway company and the former chairwoman of government company Israel Natural Gas Lines.

Noble denied purchasing the land. Sneh and Delek both declined to comment.

Meanwhile, it just so happens that the Infrastructure Ministry's gas authority is considering letting the companies bring the gas from the Tamar and Leviathan fields ashore at Acre.

Last July, the National Planning and Building Council retracted a decision to let the Tamar partners bring their gas ashore somewhere along the northern coastal plain. Tamar is located 100 kilometers west of Haifa, and the council had been considering sites in Haifa, Hadera, Caesarea and Dor, among others.

So the companies launched a $3 billion project to build infrastructure to bring Tamar's gas ashore farther south, at Ashdod, via the Mari-B platform off Ashkelon's shore.

But this is considered a temporary arrangement. The Ashdod facilities are within range of Gaza's Qassam rockets, and for security reasons, Israel needs a second gas processing facility. Also, it can't handle the volume of gas that Tamar and Leviathan are expected to produce.

The Electrochemical Industries factory stopped operating after a fire in 2003, and went into liquidation in 2004 due to its more than NIS 900 million in debt, mostly to banks Leumi, Hapoalim and Discount. To receive shipments of dangerous chemicals, it had a finger of land that reached the sea, and it built its own floating port, which allowed the chemicals to circumvent nearby Haifa Port. This infrastructure is what makes the site attractive to the gas companies.

Contec Medical Vision had told the liquidator it was interested in buying the land in its current state, even though it contains serious underground pollution, which may cost as much as NIS 50 million to clean up. Contec also acknowledged that part of the land had been expropriated by Israel Railways and that it bore tens of millions of shekels in debt to the Israel Lands Authority and the Acre municipality.

According to the companies registry, Sneh and her husband Nitzan own 65% of Contec. Sneh was chairwoman of Israel Natural Gas Lines for four years, through 2008.

If the national planning authority may let the Tamar partners bring their gas ashore at Acre, it may allow them to do so via a pipeline that already exists at a main Haifa-area intersection known the Check Post. Israel Natural Gas Lines would be the party responsible for hooking up Tamar to the pipeline.

Sneh owns a law practice that specializes in high-tech and venture capital, and has been a legal adviser and manpower manager for the RAD Binat Group for 15 years.

Energy sector sources expressed surprise that Sneh would be interested in that land parcel, and wondered how she had managed to raise the NIS 110 million needed to buy it. Given that Noble Energy has been looking for a plot of land to build gas facilities, they speculated that the company might be using Sneh to purchase the land quietly, without raising protests from residents.

On the other hand, this could be an initiative by a group of investors hoping to profit by selling the plot for a higher price.

While no clear connection has been found between Contec and the gas companies, Sneh's representative in the deal, Attorney Amir Goddard is a partner at Rosenberg, Hacohen, Goddard and Ephrat, which is Noble's representative in Israel.