Published: Fri, January 17, 2020
Markets | By Otis Pena

Following Similar Deal with Jordan, Israel Begins Exporting Natural Gas to Egypt

Following Similar Deal with Jordan, Israel Begins Exporting Natural Gas to Egypt

Israel has started pumping natural gas from its maritime reservoir to Egypt, implementing a recent historic cooperation agreement between the two countries, according to a rare joint statement issued by the Egyptian and Israeli energy ministries. The statement called the event an "important development useful for the interests of both countries".

Last month, Energy Minister Yuval Steinitz signed the permits describing the entire operation as an "historic milestone for the State of Israel". The deal is valued around $15 million. Israel will start by exporting 5,663,000 cubic meters of gas per day to its North African neighbor.

The gas is being supplied by a subsea pipeline which connects Israel and Egypt's Sinai peninsula, and once brought Egyptian gas to Israel that was sold far below market rate.

Dolphinus in September 2019 committed to buying around 60 BCM of natural gas from the Leviathan field.

Under the pact, Israeli gas will be processed at Egyptian liquefied natural gas factories before being exported to Europe.

The Israel-Egypt gas deal went into effect shortly after another deal between Israel and Jordan was put into motion.

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The energy deal adds an economic factor to a relationship that's been focused on security since the two countries signed a peace treaty that changed the face of the Middle East four decades ago.

The North African country is now exporting one billion cubic feet of gas to Europe every month via 10 shipments, the country's petroleum minister said in remarks published on Wednesday.

Molla also said Egypt was planning a bidding round for oil drilling in the western Mediterranean Sea and was in talks with Chevron, Exxon Mobile and Total.

Cyprus too has made significant finds and has plans to pump its gas to Egypt for liquefaction and re-export to Europe. It holds some 10 trillion cubic feet of natural gas, half of the amount held in Leviathan.

Israeli activists, including those who live ashore from Leviathan's production platform, which sits 10km off the coast, have also protested over environmental concerns and tried unsuccessfully to block operations in Israel's Supreme Court.

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