Netivei Hagas: The Nitzana Execution Map and What Is Already Funded Today
Exporters have already committed to fund the full Nitzana build, and by year-end 2025 the company had already received about NIS 1 billion from them. The problem is that this cash sits years ahead of the line's expected 2029 revenue start, while milestones, a dollar compressor contract, and a tight execution environment still have to be worked through.
What This Follow-up Is Isolating
The main article argued that 2025 moved Netivei Hagas from a funding bottleneck to an execution bottleneck. Nitzana is where that argument needs the closest inspection. On one side, the line has already crossed the "if" threshold: all exporters signed transportation agreements, the condition precedent for full funding of the line's construction cost was satisfied, and by year-end 2025 roughly NIS 1 billion had already been received. On the other side, this is still not a project that can be called economically complete. The agreements are already in force, but the contractual "start date" is set 36 months after the conditions precedent are fulfilled, and the company only expects the annual revenue contribution to start in 2029.
That is the bridge this continuation is isolating. The right question is not whether Nitzana is better funded than a quick headline would suggest. It is. The right question is what exactly is already funded, what is still tied to milestones and delivery conditions, and where the real risk sits between the cash that entered in 2025 and the recurring revenue that is only expected several years later.
The development-table framing explains why this needs its own read. The Ramat Hovav-Nitzana line appears as a project under construction with a length of about 67 km, an estimated cost of about NIS 2.0 billion, cumulative cost of NIS 305.9 million by year-end 2025, and a construction start date of December 2025. At the same time, the table shows a dash in the column for cost recognized in the transmission tariff at this stage, while the other projects already show recognized amounts. In other words, Nitzana's current economic anchor is not tariff recognition already running through the system. It is exporter funding plus a build that still has to become an operating asset.
What Is Already Funded Today
The strong part of the story is that Nitzana's funding structure is already much further advanced than a generic "export project" headline might imply. Transportation agreements were signed in September and October 2025 with Leviathan, Tamar, and Energean. The allocation shares were then updated to 41.8% for Leviathan, 41.8% for Tamar, and 16.4% for Energean. This is not just technical detail. It is the project's funding map.
The first implication is straightforward: from the company's perspective, the basic funding condition is already behind it. The filing says explicitly that the condition precedent under which all exporters allocated capacity on the line had to sign transportation agreements, thereby committing to fund the full construction cost of the line, was satisfied. So this is no longer a case of "if funding is found." The base contractual funding is already in place.
The second implication is less obvious. The funding is formally split among three exporters, but it is highly concentrated at the counterparty level. Leviathan and Tamar together account for 83.6% of the line allocation, and both are operated by Chevron. So the real question is not only whether there are three names on the list, but how much of the economic weight sits with the same operating counterparty.
| Exporter | Nitzana allocation | What it means economically |
|---|---|---|
| Leviathan | 41.8% | The largest single funding share in the line |
| Tamar | 41.8% | Another equally large funding share |
| Energean | 16.4% | A smaller funding participant |
The strongest datapoint comes at the end of the note: as of 31 December 2025, the company had received about NIS 1 billion from the exporters. Against cumulative cost of only NIS 305.9 million by year-end, that means Nitzana had already improved the company's liquidity well before the line itself started generating revenue. That matters because it explains why 2025 can look much stronger in cash than in earnings.
Why "Full Funding" Still Does Not Close the Story
This is where the read has to become more precise. Full funding is not the same thing as a final locked cost. The commercial annex sets a connection budget of about NIS 2 billion, to be paid by the exporters according to their allocation shares and against milestones. That budget is also subject to periodic review by the regulator, and the company may update it up to a total amount equal to 12% above the budget in place at signing, no later than 180 days from the start date.
But the small print is what changes the economics. Budget increases caused by indexation mechanisms under the company's arrangements with suppliers and contractors are not subject to that 12% cap. That is the key point. It means that full funding in 2025 terms is not the same as a final cost already sealed. It means the base is covered, not that the final number is already airtight.
That becomes even clearer in the compressor agreement. On 5 November 2025, the company signed the compression-station construction agreement with Chevron. Under it, Chevron is entitled to about $285.2 million, plus about $7 million for insurance, plus VAT, to be paid gradually against milestones. In addition, there is another $21.3 million for two years of operating services. This is no longer an abstract pipeline budget. It is a large dollar-denominated execution contract with a staged-payment structure and delivery that is conditioned on acceptance tests, emergency-procedure approval, spare-parts orders, and other cumulative conditions.
That said, the agreement does contain one meaningful offset: if the actual construction cost of the compression station ends up below the contractual consideration, Chevron must return the difference. So the right reading is not that the company has gone into a fully open-ended project, but it is also not that the asset's cost is already fully locked today. It is a comparatively well-funded project that still has to be built through milestones, delivery, and cost control.
| Component | What is already locked | What is still open |
|---|---|---|
| Exporter commitments | All agreements have been signed and the full-funding condition precedent has been met | Payments continue against milestones, not as one final upfront transfer |
| Connection budget | About NIS 2 billion under the commercial annex | The company can update it by up to 12%, and supplier/contractor indexation is outside that cap |
| Compression station | Construction agreement signed with Chevron | Delivery still depends on acceptance tests, emergency procedures, and spare parts |
| Revenue contribution | The company estimates about NIS 180 million per year | Only from 2029 onward |
The Bridge Period Is the Real Risk
This is what makes Nitzana a project that has to be read through an execution map rather than just a funding map. Even if a meaningful share of the money already sits on the balance sheet, the full economics of the line are still delayed. The agreements are already in force, but the contractual "start date" set in them is 36 months after the conditions precedent are fulfilled, and the company itself only expects roughly NIS 180 million of annual revenue from 2029. In other words, 2026 through 2028 are bridge years: cash comes in now, but the meaningful earnings contribution is still ahead.
During that bridge period, the company is entering the new project while other projects have already shown how fragile the construction environment can be. In the marine lines, the company has already dealt with shutdowns, foreign-contractor standby arrangements, war-related expenses, and vessel return and storage costs. It also states explicitly that supplier availability has been hit and prices have risen because of restrictions on importing pipe from Turkish manufacturers, with a material impact on the company's investment costs. That does not mean Nitzana has already gone over budget. It does mean Nitzana is being executed inside an environment where budgets can reopen and schedules can slip.
The regulatory context does not erase that bridge period. In December 2025, the gas council published both the 2026 system tariff and the methodology for the non-continuous export-transport tariff. But the company itself said that neither decision is expected to have a material effect on its financial position or results. So the Nitzana thesis for 2026 through 2028 is not one of near-term tariff relief. It is one of milestone delivery, compression-station handover, and control over the years between early cash receipt and later revenue recognition.
The Bottom Line on Nitzana
Nitzana looks more funded today than a superficial reader might think. This is not another export idea waiting for a counterparty. All exporters have signed, the allocation shares have been updated, about NIS 1 billion has already been received, and the company is pointing to a meaningful annual revenue stream once the line is operating. In that sense, 2025 already moved the project from the question of "whether" to the question of "how."
But this is exactly where the follow-up has to stay disciplined. Early funding is not the same thing as closed execution. In Nitzana, that gap is built into the project structure: the budget is paid against milestones, part of the execution burden sits in a large dollar contract, delivery depends on a series of tests and conditions, and the fuller revenue stream is only expected in 2029. So what really matters over the next two years is not whether a first round of funding was secured. It is whether the company can get through the bridge period without reopening the budget and without another delay that pushes back the revenue start once again.
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