Israel and Egypt sign letter of intent for natural gas deal

 

Israel’s offshore Leviathan natural gas field to supply Egypt with gas via existing Egyptian underwater pipeline via the Sinai.

By i24news

 

Israel’s offshore natural gas field Leviathan will supply gas to Egypt via an existing underwater pipeline to the Sinai peninsula, Leviathan’s partners said in a statement to the Tel Aviv Stock Exchange on Wednesday after signing a preliminary deal.

Leviathan gas field in Israel – Photo: AFP

As part of the deal, Leviathan will supply Egypt’s Dolphinus Holdings with up to 4 billion cubic meters of gas a year for 10 to 15 years.

Though Egypt used to be a major regional gas exporter in the region, with Israel being one of its clients, the tables have turned in recent years, owing to several factors – including, in Egypt, instability in the Sinai Peninsula region – where several large fields are located – due to the rise of the Islamist insurgent group Ansar Bait al-Maqdis, and in Israel, the discovery of large off-shore gas fields.

Delek Group and Noble Energy, the chief partners in Israel’s Leviathan and Tamar offshore gas fields, reached trade deals with Jordan and Egypt in September and October of last year.

Last month, Italy proposed a joint Italian-Israeli-Egypt cooperation on natural gas. The issue was first discussed by Netanyahu and Italian Prime Minister Matteo Renzi in their August 30 meeting in Florence, which took place hours after Cairo announced the historic discovery of a natural gas field off the coast of Egypt.

The enormous discovery, described as the largest ever natural gas resource found in the Mediterranean Sea, was considered a significant blow to Israel’s own hopes of achieving energy independence by becoming a natural gas export powerhouse. According to a well informed source, Renzi raised the prospect of Israel joining forces with Eni, the Italian energy giant developing Egypt’s gas reserves, and connecting subsea fields in Israel to Egypt’s pipeline network, enabling export to Europe.

Israel’s Tamar natural gas field – Photo: Albatross Aerial Perspective/AP

An Israeli official confirmed that Eni representatives will be arriving in Israel this week, though stressed that discussions are only in “very initial stages.”

The field discovered by Eni, Zohr, is considered a game changer in the Mediterranean energy play. The field can hold a potential of 30 trillion cubic feet of gas – thirty percent larger than the Israeli Leviathan field which held the title until today. The discovery came amid a serious Israeli delay in production from its own natural gas fields, Tamar and Leviathan, due to political disputes over price export and profits with the companies developing the fields, Delek Drilling and Noble Energy.

 

View original i24news publication at:
http://www.i24news.tv/en/news/international/middle-east/93563-151125-israel-egypt-sign-preliminary-natural-gas-deal

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