TEL AVIV-based law firm Gornitzky & Co. has been active in all major energy projects in Israel since the Israeli government enacted legislation in 1996 to start the privatization of the energy sector. This long-standing experience from an early stage has not only put Gornitzky at the forefront of the country's energy practice, it has helped Gornitzky play a key role in shaping the private energy market in Israel.
Gornitzky has appeared on behalf of clients before Knesset committees and key regulatory panels to ensure that the legislation adopted will adhere to international standards so major energy projects can be developed and financed. For example, Gornitzky has also represented two of the country's largest private gas consumers in deliberations held by the Economic Committee of the Knesset on the draft bill of the Natural Gas Economy Law.
Gornitzkys clientele includes Israeli and foreign energy corporations, major independent power producers (IPPs) and international consortia, as well as chemical companies, desalination plants, oil companies, private investors and other energy players. Its Energy & Natural Resources team has acquired extensive experience and know-how in all areas of the energy market, such as natural gas, oil and gas explorations, refineries and fuel supply, private power stations, electricity purchase and power generation, solar energy, water desalination, build-operate-transfer (BOT) transactions, renewable energy projects and others. Gornitzky represents its clients in their negotiations with Israel's gas transmission company, local utilities companies and the Natural Gas Authority.
The firms services include the representation of clients, both in Israel and abroad, in tenders for licenses for the construction and operation of projects in Israel, as well as in their other related ventures. Gornitzky's expertise in this area, in conjunction with its forerunning status in the infrastructure and project financing sector, enables Gornitzky's legal team to provide comprehensive and professional legal support for all projects in the energy sector.
Jack Smith, a partner at Gornitzky, recently talked to Howard Stock about the challenges and opportunities in the firms chosen area of specialty, energy law.
GORNITZKY'S ENERGY PRACTICE IS CONSIDERED A LEADING PRACTICE IN ISRAEL. HOW IS THIS DEMONSTRATED IN SOME OF YOUR RECENT CASES ?
We recently completed the financial closing of the first gas fired and solar power fields in Israel. This illustrates our status in the market as representing the cutting edge projects in the energy sector. The developers of these projects know that with our knowledge and reputation in the markets and our stature in the eyes of the lenders and the regulators, we can come up with solutions to resolve problems that are common to first-time projects in the energy sector. Our success as pioneers in the achievement of these projects has maintained our position as a firm with not only the knowledge but also the unique experience in getting major energy projects done, even if the lenders and regulators have not yet been exposed to all the complexities involved in these types of projects.
Our recent gas fired IPP project was particularly interesting since it also involved obtaining financing for the first private electricity contracts executed between an independent power producer and private electricity customers. Our work involved drafting from scratch a private power supply agreement and convincing the lenders that it was a bankable contract. Another challenging project we undertook at that time was the completion of the largest private sector gas contract in Israel (for a value of about USD5bn) between a consortium of Israeli industrial companies and power producers and the Egyptian gas supplier. This was a complex deal that combined together 6 different large contracts part of which needed to be approved by project lenders. Following the collapse of Egyptian gas supply to Israel due to attacks on the pipeline between Egypt and Israel, our firm has led the legal strategy and efforts for our clients to terminate the agreements and prepare damages claims.
GORNITZKY IS CITED FOR ITS WORKPLACE DIVERSITY. HOW DOES THIS DIVERSITY HELP YOUR PRACTICE FUNCTION BETTER ?
We have an energy practice team comprised of male attorneys who do reserve duty in the army, working mothers and associate lawyers going for extra degrees. This creates a unique team spirit within our practice that each attorney is prepared to fill in for the other and also has the effect of exposing each of the lawyers in our practice group to the broad spectrum of areas that together comprise energy law, and not to have select lawyers focusing on only one matter.
GORNITZKY HAS CRITICIZED TIGHTENING OF REGULATIONS IN ISRAEL. WHAT'S GOING ON AND WHAT NEEDS TO HAPPEN ?
The energy market is usually a regulated market worldwide. Our criticism is that in an early stage of the market, the regulators are sitting too long on debating as to how to make policy and this has slowed down development. We feel that a developer should assume that the regulator will not adopt a framework which is 100% to the liking of the client and therefore it is invaluable to the client to retain our firm, which has been able to employ creativity and know how to circumvent regulatory hurdles.
WHAT SPECIFIC AREAS OF OPPORTUNITY DO YOU SEE FOR FUTURE BUSINESS IN THE ENERGY SECTOR ?
We believe that the main area for development in the energy field is the upstream oil and gas exploration and production, including export of liquified natural gas (LNG). Our firm is representing number of offshore licenses that are being developed and expect to be involved in the LNG export project. Israeli law in this area is either being totally revamped or legislated from the ground up and it will be crucial for the developers of these projects to work with a law firm that has a deep understanding of the international energy practice and will know how to impart key issues to the regulators.
For more information about Israel's preeminent energy sector specialistlaw firm, visit www.gornitzky.com