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Israel signs gas deal with Egypt worth $15bn

February 20, 2018 at 11:05 am

An aerial view of an Israeli offshore gas rig [Albatross Aerial photography/Noble Energy]

Reports from Israel have revealed details of a $15 billion deal to export 64 billion cubic metres of natural gas over 10 years to Egypt, said on Monday. 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.

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” 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.”

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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.

Israel prevents the Palestinian Authority from drilling in the gas fields located in Palestine’s territorial waters off the Gaza coast. Having its own gas supply could ease the fuel and electricity crisis in the Gaza Strip.