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Egypt is evaluating whether the stoppage of gas production at an Israeli field following the Hamas attack would scupper its plans to resume LNG exports to Europe as planned, anonymous officials have told Bloomberg.
Egypt, which aims to become a regional gas hub, has been exporting LNG to Europe from its terminals on the Mediterranean with gas from domestic production and from fields offshore Israel.
However, Egypt did not export any LNG in June, August, and September, due to high domestic power demand in the summer months.
Last week, Egypt’s Minister of Petroleum Tarek El Molla told Reuters that the North African country planned to resume LNG exports in October, with no quantities yet defined.
But this weekend’s attack by Hamas on Israel could derail Egypt’s LNG export plans.
Following the attack, Chevron, the operator of the Tamar gas field offshore southern Israel, shut down production at the field per instructions from the Israeli energy ministry.
“Chevron Mediterranean Limited was instructed by Israel’s Ministry of Energy to shut in production at the Tamar Production Platform,” the local unit of the U.S. supermajor said in a statement carried by Reuters.
While Tamar was ordered shut, another field offshore Israel, the giant Leviathan field, continues to operate normally, Chevron said on Monday.
After the shutdown of the Tamar field, Israel will seek alternative sources to meet its energy needs, the Israeli energy ministry said.
Israel told Egypt about the temporary halt of production at Tamar on Saturday. As of early Tuesday, the Israeli government had not informed Egypt of any plans to suspend gas production at the giant Leviathan field, one of the Egyptian officials told Bloomberg.
After the shutdown of the Tamar field and amid fears of lower gas supply to the Mediterranean countries, Europe’s benchmark natural gas futures shot up by 15% on Monday and continued to rally by 4% early on Tuesday Amsterdam time.
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.