Media reports have revealed details of a $15 billion deal to export 64 billion cubic meters of natural gas over 10 years to Egypt.
Bloomberg reported “A $15 billion deal to export Israeli gas to Egypt is moving forward after months of talks, bringing Israel a step closer to becoming an energy exporter to the most populous Arab country.
The agreement, which was signed by the Israeli company Delek Drilling, with its US partner Noble Energy, and Egypt’s Dolphinus Holdings, was described by Israeli officials and media as the largest-ever export agreement for the country’s gas industry.
The Chief Executive of Delek Drilling, Yossi Abu, called the deal “good news” for both countries. He expects Egypt will use the gas for the domestic market, and added that, “Egypt is becoming the real gas hub”for Israeli gas in the region.
The gas is going to be delivered from the Tamar and Leviathan fields and is expected to start flowing next year, said Ynet News. According to Abu, it could be delivered via the existing pipeline between Jordan and Egypt.
Delek Drilling stated that the means of transferring the natural gas from Israel to Egypt are currently Being considered, including the pipeline of East Meditteranean Gas (EMG).
In September 2016, Jordan signed a 15-year-agreement with Israel to import Israeli gas in an agreement worth of $US 1o billion.
Israeli Energy Minister Yuval Steinitz said that the deal is a “very important milestone” as one of the ” first big, significant, serious export deals between Israel and the Arab world.”
The “historic agreement”,as been called by Israelis, has been welcomed by Prime Minister Benjamin Netanyahu. “Many people did not believe in the gas outline,” he said.
“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.”
The Israeli deal is scheduled to start gas supplies to Egypt in 2020.
By 2023, Delek has said it expects Zohr output will just meet Egypt’s demand and only for a limited time. Egypt’s gas demand in 2016 was 46.1 million tons of oil equivalent, while its production was 37.64 million tons, according to Bloomberg.
The announcement followed news that the Egyptian gas company is going to pay compensation worth $1.03 billion to Israeli companies for losses incurred due to the blowing-up of the gas pipeline in Sinai.
It is worth to mention that Israel prevents the Palestinian Authority from drilling in the gas fields located in Palestine’s territorial waters off the Gaza coast.
The agreement sparked outrage in Egypt after it had been announced. The spokesperson of the Egyptian Ministry of Petroleum said in a press release that the ministry doesn’t have any comments on any negotiations and agreements that are held by the private sector regarding importing or exporting natural gas.
Analysts believe that this agreement opposes the promise of Egypt’s president Abdel Fattah al-Sisi that Egypt will achieve self-sufficiency of gas,according to the BBC.