Tamar Gas Field [Photo Source: Oil & Gas News – East Mediterranean]

On Monday, two companies, Israel’s Delek Drilling Ltd. and Houston-based Noble Energy Inc., announced that together they had reached an agreement with an Egyptian company, to export $15 billion of Israeli natural gas in two 10-year agreements. The natural gas to be exported will come from the Leviathan and Tamar offshore gas fields located in Israel. The 2 partners in Israel’s Tamar and Leviathan offshore gas fields said they would supply the private Egyptian firm Dolphinus Holdings with around 64 billion cubic metres of gas over a decade – with half coming from each field, and the proceeds shared equally.*

Delek said Dolphinus was a natural gas trading company that plans to supply large industrial and commercial consumers in Egypt. It added that Egypt had amended regulations last week to allow private groups to import gas. An Egyptian government official, who declined to be identified, said the deal did not mean Egypt itself would import any gas from abroad. “International private companies will import gas from abroad in the framework of their own needs, and will liquefy and export them again,” the official said, without elaborating.

The Leviathan site, located about 80 miles (130 km) west of Haifa, was discovered in December 2010 and is scheduled to start producing by the end of 2019. Exports from the Tamar site, which began production in 2013, are expected to start under the deal sometime between the second half of 2020 and the end of 2021.

Prime Minister Benjamin Netanyahu made the following enthusiastic comment in response to the agreement to export Israeli gas to Egypt: “I welcome the historic agreement that was announced on the export of Israeli gas to Egypt. This will put billions into the state treasury to benefit the education, health and social welfare of Israel’s citizens. Many people did not believe in the gas outline. We led it knowing that it would strengthen our security, economy and regional relations, but – above all – that it would strengthen Israel’s citizens. This is a joyous day.”

 

Yuval Steinitz, Israel’s energy minister called the deal the most significant export deal with Egypt since the neighbors signed their historic peace treaty in 1979.

In order for the deal to be finalized, both countries will need to authorize the transfer of the gas from Israel to Egypt.

*Reuters contributed to this article