Israel buys share in Egypt-Israel gas pipeline company

Israel’s Delek Drilling and the US’ Noble Energy yesterday sealed a deal which would see them buy shares in Eastern Mediterranean Gas (EMG) which owns a gas pipeline between Israel and Egypt, local media reported.

Under the agreement, the two companies acquired a 39 per cent share in Egypt’s EMG for $518 million, allowing Israel to export natural gas to Egypt in early 2019, Israel Radio said.

Delek Drilling and Noble Energy, which jointly develop Israel’s Tamar and Leviathan gas fields paid $185 million while Egypt’s East Gas paid $148 million to buy a stake in EMG.

The Egyptian General Petroleum Corporation currently owns 68.4 per cent of EMG shares while the Israeli company, Merhav, owns a 25 per cent share, and the Israeli company Ampal Israel owns 6.6 per cent of the company.

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Under the terms of the deal EMG agreed to drop all lawsuits filed against Egypt over the cancellation of a gas deal with Israel several years ago, Delek Drilling said in a statement.

“This is an 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.

In February, Egypt and Israel signed a $15 billion agreement under which Tel Aviv will supply Cairo 64 billion cubic metres of natural gas over a period of ten years.