Israel signs agreement to pump natural gas to Egypt

An agreement has been signed to allow Israel to pump natural gas to Egypt, Israeli newspapers have revealed.

“The Tamar consortium, led by Texas-based Noble Energy and Israel’s Delek Group, said in a statement that they signed a letter of intent to negotiate with Dolphinus Holdings, a firm that represents non-governmental, industrial and commercial consumers in Egypt,” Haaretz said.

The agreement is said to renew Israel’s supply of gas to Egypt through a pipeline linking the two countries. This new agreement will allow 2.5 billion cubic metres of gas from Israeli warehouses to be pumped to workers in the Egyptian field industry.

Israeli newspaper Yedioth Ahronoth also said that the Israeli company has signed agreements with numerous Middle Eastern customers including the Palestinian Authority. This new contract also encompasses an agreement between Israeli and Jordanian electric power companies.

The report said: “The signing of this new agreement with Egypt was made possible by the significant improvement made the Sinai Peninsula over the course of the last few months. The improvement of the security situation, along with the fact that the pipeline between the two countries continues to exist, means that we do not need to use more funds to expand the existing pipeline. The agreement was reached despite the fact that there is still the danger that the pipeline could be bombed again.”

Any damage done to the pipeline would become the responsibility of the buyer; Egypt, according to the agreement.

Yedioth Ahronoth said: “There is no doubt that this will pave the way for strengthening relations between Israel and its neighbours.”

According to the economic newspaper the Marker, the value of this agreement amounts to $700 million per annum, which means that the price of natural gas per unit will be marked at $7.50, a price that has been standard throughout agreements signed within the region.