Ashdod Refinery: From Cogeneration To A Power Platform, What Is Real And What Is Still Optionality
Ashdod Refinery already has a real 109 MW power layer and external electricity sales, but the move toward a broader power platform still rests mainly on a 55 MWh storage project with a 5 MW turbine and on an 800 MW framework plan that still lacks a disclosed budget, financing package, and closed execution timeline.
What This Follow Up Is Isolating
The main article already established that power is a real part of Ashdod Refinery's economics, but not yet a layer that fully detaches the company from dependence on refining. This follow up isolates the narrower question sitting right in the middle: what inside the power story is already operating, what is taking shape as a real capital project, and what still sits mostly at the level of strategy language.
It is easy to get carried away by a presentation that speaks about transforming from a refining company into a leading energy and infrastructure player in Israel. But once the presentation is read together with the business description, a clearer hierarchy appears. There is an operating power layer that already generates and sells electricity. There is a relatively advanced storage project with a cost estimate, approvals, and a timeline. And there is a framework plan for an 800 MW third power plant that still lives in the planning and regulatory stage. Those three layers do not deserve the same weight.
That is why this is ultimately a capital allocation read. Ashdod Refinery's 2026 still looks like a year of measured expansion around the refinery's electricity layer, not like a leap into a national scale generation platform.
| Layer | Current status | What is already disclosed | What is still missing |
|---|---|---|---|
| Existing power plants | Operating | Two cogeneration plants, about 109 MW and roughly 120 tons of steam per hour | Proof of a real power layer, but not of a standalone power business |
| Storage project and turbine | Advanced project | About 55 MWh of storage, a 5 MW turbine, estimated cost of about $30 million, local approval from July 2025 | Execution, remaining permits, and actual commissioning |
| Third power plant | Framework plan | About 800 MW, intended connection to the national grid, policy and planning support | Budget, financing, contracts, permits, and a project level timetable |
What Is Already Real
Ashdod Refinery's electricity layer is not a future idea. The company operates two gas fired cogeneration power plants at the refinery site, producing about 109 MW of electricity and roughly 120 tons of steam per hour combined. The first plant, commissioned in 2009, produces about 49 MW and 60 tons of steam per hour. The second plant, commissioned in 2012, adds about 60 MW and another 60 tons of steam per hour.
This matters because electricity is not only an internal utility function. About 30% of the generated electricity is consumed by the refinery itself, while the balance is sold to private customers under bilateral contracts and to the system manager. The presentation also makes clear that the immediate agenda for the electricity segment is to strengthen continuity, utilization, and efficiency, while also improving trading and sales capabilities.
But this is exactly where the boundary sits. This is still not a standalone utility. All the steam produced by the power plants is consumed by the refinery, and the company states explicitly that the power plant cannot be operated without relying on refinery activity. That means the current electricity layer is real, commercial, and useful, but structurally tied to the economics of the refining site rather than separable from it.
That distinction matters at the valuation level as well. A cogeneration engine that creates value inside an industrial site is economically different from an independent power plant selling into the national grid. Ashdod Refinery therefore already has a power leg, but it is still a power leg connected by design to refining.
What Takes Shape In 2026
If there is one next step that is actually taking form, it is not the 800 MW plant. It is the storage project. The company says it is in advanced stages of establishing a high voltage electricity storage facility with capacity of about 55 MWh, combined with a 5 MW steam turbine. This is no longer only an aspiration. It comes with a cost estimate, a permit milestone, and an operating timetable.
Estimated cost is about $30 million, with most of that expected to be recognized in 2026. In July 2025 the local planning and construction committee in Ashdod approved the project, subject to standard conditions. Management's estimate is that the storage facility will begin operating during 2026, while the steam turbine will be integrated in the first half of 2027.
The significance is twofold. First, it shows that the company is trying to expand its power layer by leveraging infrastructure it already owns, rather than by starting from scratch. Second, it shows that the next project the company is actually prepared to frame is still a defined, mid sized step, not a direct jump by a refinery into a utility scale generation platform.
This chart is intentionally simple. It does not include the storage energy capacity itself, which is measured in MWh, and instead focuses only on the generation layers measured in MW. What it reveals is not only a technical gap, but a difference in project class. The distance between 109 MW operating today and 800 MW planned on paper is economic, regulatory, and financial.
Where Optionality Begins
That brings us to the third plant. The company is promoting a framework plan for a third power plant on the Ashdod Refinery site, with capacity of about 800 MW, intended to sell electricity into the national grid. If it is ever built, it would move well beyond power as a supporting refinery layer and could genuinely change the company's profile.
But it is important to be precise about the stage of maturity. On the positive side, the company does point to real policy support. Government decision 2282, dated October 31, 2024, set targets for additional conventional generation capacity in 2031 through 2035, including a need for four plants in region 3, which is the region that includes the refinery. Electricity Authority decision 69701, dated November 11, 2024, instructed the system manager to advance outline planning for gas fired generation facilities and related infrastructure. Later, on June 18, 2025, the Planning Administration recommended to the Minister of Energy that the company be certified to establish the facility, subject to review of the issues listed in that recommendation letter.
Still, none of that means the project is closed. The company says it is working to obtain that certification through government approval, but it does not disclose an estimated project budget, a financing structure, electricity sale agreements, contractor arrangements, or a detailed execution timetable. At this stage the third plant is a regulatory option with strategic value, not yet an asset that can be treated as part of the company's operating base.
The presentation reinforces that interpretation. It groups three different verbs under one growth umbrella: strengthening current operations, becoming a meaningful player in the power market, and entering new fields of activity. That is an important message, but also one that has to be unpacked. The first layer is already working. The second is partially taking shape through storage. The third, which includes a large power plant and new business fields, still sits farther away from disclosed economics.
Capital Allocation Before The 800 MW Dream
To read the power story correctly, it is not enough to look at headline capacity. The investment queue the company actually disclosed matters just as much. Alongside the storage project, Ashdod Refinery is also advancing a naphtha debottleneck project intended to remove a bottleneck in the naphtha hydrodesulfurization unit and either increase overall refinery throughput or allow operation with lighter feedstocks. Estimated cost is about NIS 12 million, and the project is expected to be completed in the second half of 2026.
That comparison is important. It shows that 2026 still looks like a year of two relatively defined moves: one that seeks to expand the electricity layer around the site, and another that seeks to improve the core refining economics. This is not yet the capital allocation profile of a company that has already committed itself to becoming a large scale power developer.
The financing layer tells a more cautious story than the strategy slides as well. At the end of December 2025 and start of January 2026, the company renewed binding credit lines for 12 months up to a total of NIS 1.925 billion, along with a receivables discounting framework of NIS 445 million. At the same time, the banks agreed that, for purposes of the financial ratios, losses on sales of defective feedstock inventory and all related insurance proceeds would be neutralized.
That needs to be read correctly. The renewed lines are an important strength for ongoing operations and, indirectly, for the ability to execute medium sized projects. But they are also short dated, bank dependent, and arrive after an adjustment to the EBITDA definition used for covenant purposes. This is not a disclosure base that demonstrates long dated financing for an 800 MW plant. At most, it shows that the company currently has room to keep strengthening the existing platform and to advance the storage project.
This is the core distinction. It is reasonable to give value to the existing electricity layer, and it is also reasonable to assign weight to the storage project as the first real expansion step. But anyone trying to build Ashdod Refinery's value story today around a full third power plant is skipping several stages that are still absent from the filings: budget, financing, permits, contractual structure, and execution.
Conclusion
The right read of Ashdod Refinery's power story is not that the company has already become a broad power player, but also not that the idea is only a slide deck fantasy. There is a real electricity layer operating today, there is a defined storage project that marks the next step, and there is interesting regulatory optionality around a third power plant.
The ordering of those three layers is what matters. The existing 109 MW are a real supporting engine, but one still tied to steam and refining. The 55 MWh storage project with a 5 MW turbine is a tangible expansion because it comes with cost, approval, and timing. The 800 MW third plant could eventually turn Ashdod Refinery into something much broader, but at this point it is still not a project backed by full financial and regulatory disclosure.
So the key question for the next filings is not whether Ashdod Refinery wants to become a broader energy company. It is already saying that clearly. The key question is whether 2026 delivers the first proof that this layer can move from strategy language to power that is visible in executed projects, defined capital allocation, and economics that can be seen outside the refinery gate.
Disclosure: Deep TASE analyses are general informational, research, and commentary content only. They do not constitute investment advice, investment marketing, a recommendation, or an offer to buy, sell, or hold any security, and are not tailored to any reader's personal circumstances.
The author, site owner, or related parties may hold, buy, sell, or otherwise trade securities or financial instruments related to the companies discussed, before or after publication, without prior notice and without any obligation to update the analysis. Publication of an analysis should not be read as a statement that any position does or does not exist.
The analysis may contain errors, omissions, or information that changes after publication. Readers should review official filings and primary sources before making decisions.