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An Egyptian company is set to begin importing gas from Israeli offshore fields in the first quarter of 2019 and to re-export it as part of its plan to become a regional gas hub, sources in Egypt’s energy industry tell Reuters.
In February this year, Israel’s Delek Group and Houston-based Noble Energy—the main partners in two large gas fields offshore Israel—signed agreements to sell significant quantities of natural gas from the Leviathan and Tamar fields to Dolphinus Holdings to supply gas in Egypt.
These agreements, one for natural gas from Leviathan and one for Tamar, each provide for total contract quantities of 1.15 trillion cubic feet of natural gas. The natural gas sales, both under 10-year contracts, are expected to supply industrial and petrochemical customers as well as future power generation in Egypt, Noble Energy said back in February.
The price of the gas to be supplied under both export deals will be set by a price formula linked to Brent Crude prices. Delek has estimated that the total revenues from the Tamar and the Leviathan gas sale deals to Egypt may reach US$15 billion.
Egypt has received the backing of the World Bank in its efforts to be a regional oil and gas trading hub, as several new gas projects started up recently in the Mediterranean country.
Following the start-up of the giant gas field Zohr, Egypt has become an important player in the Mediterranean. Zohr, discovered by Eni in 2015, plays a key role in helping Egypt to avoid the need to import liquefied natural gas (LNG), according to the Italian oil and gas major.
In June, Egypt issued what is likely to be its last LNG import tender, and could begin exports early in 2019, Egypt’s Petroleum Minister Tarek El-Molla told Bloomberg at the time. The June tender was for Egypt’s third-quarter gas needs, and it might not need to import LNG for the fourth quarter and onwards, the minister said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.