Israel Egypt gas deal expected by mid-2014

Late last year the Middle East Monitor revealed that plans for an Egyptian – Israeli gas deal were underway, with Cyprus acting as a possible middleman. Now, the Israeli business website, Globes has revealed that plans to export Israeli gas via Egypt are underway. The Globes website report confirms that Israel and Egypt are in negotiations to develop an export plan that will allow for the transfer of gas from the Israeli Leviathan gas field via Egypt. The report suggested that the plans would come to fruition by mid-2014 when Egypt may be more politically stable.

In the MEMO report last November, it was suggested that the talks between Egypt and Israel that had come about since the ousting of President Morsi in the July 3rd coup, the development of a gas import-export relationship would be of political benefit to the two countries. Since the coup, the Egypt and Israel relationship has taken a different turn, with Israel pleased that the Muslim Brotherhood is out of power (who they see as supportive of the Hamas government in Gaza) and Egypt grateful of Israeli military support in the Sinai. Further, as the Globes report explains, Egypt is “desperate to import natural gas.”

The Globes report identifies the Leviathan gas field as the point from which Israel will be exporting, but in 2013, Egyptian journalist revealed that whilst the Israelis may be using the field to export from, it may not in fact be theirs to do so. He argued that Egypt had claimed that the gas field was actually a 235km away from Israel, not the 190 km that Israel claimed and that therefore it was in fact closer to Cyprus at 180km. Despite this, according to the Globes report “the possibility of exporting Israel’s Leviathan gas via the Egyptian LNG installations could be a dream deal. The owners of the installations would build a pipeline to the Israeli field at their expense and save losses of billions of dollars.”

As the MEMO report revealed late last year the plans to strengthen the Egyptian Israeli gas relationship were well underway, now the Globes report confirms that this is indeed the case. Despite the turmoil in the country, Globes expect that a deal could be done within six months when a new parliament is formed, expecting stability to return to the country. However, the turmoil in Egypt could well continue as oppositionist continue to call for a return to legitimate democracy, should this happen a gas deal between the two countries may not be as straight forward, whilst the coup authorities remain in power it is likely that the gas deal could come to fruition.