Israeli Company Inks $15 billion Gas Deal with Egypt

An energy company in Israel just recently announced a $15 billion deal to supply natural gas to Egypt. This is the largest export agreement for Israel’s natural gas industry.

Delek Drilling and its United States partner Noble Energy, signed a contract to sell total 64 billion cubic meters of gas over a 10-year period to Dolphinus Holdings, an Egyptian company.

Chief executive of Delek Drilling, Yossi Abu called the deal “great news” for both countries. He said that he believes huge amounts of the gas will be used for the domestic Egyptian market. Abu nonetheless hopes this deal could pave the way for wider cooperation and could help turn Egypt into an export center for Israeli gas.

Dalek Drilling’s chief is optimistic that soon Egypt will become the real gas center of the region. He added that Egypt was the first Arab country to make peace with Israel in 1979.

The gas will be supplied from Israel’s Tamar gas field of Israel, which is already active, and the Leviathan field, a much larger gas field that is expected to start pumping gas in late 2019.

Abu said that a number of roads for shipping the gas are in consideration, with a remaining pipeline between Jordan and Egypt a strong candidate. He said that Israel already deliver gas to Jordan.

For the past 10 years, Israel has been developing natural gas fields off its Mediterranean coast. Delek and Noble signed Israel’s first export agreement to provide 45 billion cubic meters of gas to Jordan in 2016, which is a 15-year deal worth $10 billion.

The gas deals reveal Israel’s mutual strategic interests with Jordan and Egypt, both of which are important allies of the United States.

Israel holds soft security ties with the two countries, especially Egypt, which is fighting an Islamic militant insurgency in its Sinai desert, close to the Israeli border.

Yuval Steinitz, Israel’s Energy Minister called the deal a “very important milestone”.    He told the Army Radio that it is the first time since the signing of the peace agreements with Egypt and Jordan that there are big, significant, serious export deals between the Arab world and Israel.

Benjamin Netanyahu, the Prime Minister hailed what he called “the historic agreement,” saying it would bring in billions of dollars to Israeli state coffers.

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