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Sunday, 8 May 2016

Israel to submit a proposal that would allow gas exports

The Israeli government will “soon submit to Noble Energy Inc. and Delek Group Ltd. a proposal meant to unblock stalled development of the Leviathan natural gas field and allow exports to Egypt and Turkey,” Energy Minister Yuval Steinitz said, as per Bloomberg. Without providing details, Steinitz said a solution could be reached soon, “in a matter of weeks, no more than a couple of months.” He said “we will probably see some kind of softer stability commitment, but still significant … I want to give them something which is softer but still substantial, which according to our experts has a reasonable chance not to be rejected by the court once again… The prices they will get in Jordan, Egypt, and hopefully in Turkey — because we are very close to resuming a diplomatic relationship with Turkey — are high.”

Still at issue, though: a USD 1.76 bn international arbitration award won by Israel Electric against state petroleum companies EGPC and EGAS and pipeline operator EMG for halting gas supplies to Egypt more than three years ago. Prime Minister Sherif Ismail, a backer of Egypt’s bid to become a regional natural gas hub, has said there will be no open discussion of gas imports from Israel until the arbitration award is cleared. Israeli exports to Egypt, as we’ve reported extensively, would rely on EMG reversing its pipeline. Alaa Arafa’s Dolphinus Partners is among those leading the charge to use EMG, having concluded an import deal with partners in Israel’s Tamar offshore gas field.

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