Why Israeli gas companies will need US tax dollars
Israel’s largest gas company, Gazprom, has been awarded a US tax subsidy worth $12.6 billion, according to documents released by the US Treasury Department.
The US Treasury has said it plans to award a subsidy worth at least $6.5 billion to Gazprom this year to help offset the cost of gas for the country’s 3.5 million people.
The subsidies are part of a broader US-Israeli deal on infrastructure, energy and environmental cooperation that was announced on Friday.
Gazprom is the world’s second-biggest gas producer, with about 8% of the world market.
The Israeli-led energy giant has been struggling to regain market share after years of decline.
The subsidy, to be paid by the Israeli government, will help Gazprom avoid the tax bill of US-based energy firm, Marathon Petroleum.
The deal was announced by Treasury Secretary Jack Lew and Finance Minister Arun Jaitley.
It is a significant milestone and demonstrates the commitment of the US and Israel to our common future.””
This is the first time in over 25 years that a subsidy has been paid to a Russian company.
It is a significant milestone and demonstrates the commitment of the US and Israel to our common future.”
The subsidy is a “significant and timely step towards the US-Russia energy and infrastructure partnership that has become an integral part of the broader American-Israeli-Israeli strategic partnership,” the Treasury Department said in a statement.
“Gazpal is a key partner in this effort and is committed to further strengthening its ties with the United States,” it added.
In 2015, Israel and Russia signed an energy cooperation agreement that included $3.1 billion in gas and energy infrastructure projects in Israel, and $4 billion in infrastructure projects for Russia, which is a major transit country for the gas pipeline to the US.
Grosvenor Energy, a subsidiary of Gazprom subsidiary Gazprom Gazprom Industries Ltd, will get the $12 billion subsidy, the US department said.
It said it will be used to fund a number of infrastructure projects, including a new gas pipeline connecting Israel to the Caspian Sea.
Gospera, Gazpipa and Tamanzana are among Gazprom’s largest subsidiaries, with total revenues of about $4.5 trillion.