Israel, Egypt enters gas deal

The relation between old foes, Israel and
Egypt, is blossoming as they have partnered to buy 39 per cent of the
shares in the EMG pipeline for $518 million.

The deal will allow natural gas exports from Israel to Egypt to begin as early as the start of 2019, the companies said.

The deal will enable the supply of 64
billion cubic metres of gas, worth $15 billion, from Israel’s offshore
Tamar and Leviathan fields to Egypt, part of a landmark agreement signed
in February.

EMG owns a subsea pipeline that runs between Ashkelon in Israel and El-Arish in Egypt.

To buy into EMG, Israel’s Delek Drilling
and Texas-based Noble Energy, which have stakes in the Israeli fields,
will each pay $185 million while the Egyptian East Gas Co will pay $148
million.

“This is a historic transaction, that
renders Egypt a regional energy centre and positions it in line with
significant global energy centres,” said Delek Drilling CEO Yossi Abu.

The deal also includes an agreement by
EMG to end arbitration with Egypt and drop claims against Cairo
regarding the cancellation of a gas deal several years ago, Delek said
in a statement.

Noble said the partners also secured an
option for an additional route and capacity to transport natural gas
within Egypt by entering into a definitive transportation agreement with
the owner and operator of the Aqaba El Arish
Pipeline.