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Wednesday, 19 June 2019

Egypt grants Israel access to LNG plants after reaching gas settlement

Israeli gas could start flowing to Egypt’s LNG plants as soon as next month at an initial rate of 150 mcf/d, rising to 700 mcf/d within two years, according to a domestic press report citing an unnamed government official. The news comes after a USD 500 mn settlement this week resolved a dispute longstanding dispute with the Israel Electric Corporation and will give the operators of Israel’s Leviathan field, Delek Drilling and Noble Energy, clear access to global export markets.

Damietta-bound? Look for the Leviathan gas to move through the Arish-Ashkelon pipeline to Damietta, one of two Egypt’s two LNG facilities as the Idku facility still has no link with Israel. The Arish-Ashkelon pipeline is set to be used to supply Alaa Arafa’s Dolphinus Holding with the first shipments under the USD 15 bn agreement signed last year. The shipments were planned to begin in 1Q2019 but sources told Bloomberg in March that the date had been pushed to mid-2019 as the pipeline still required further maintenance.

An Israeli investment still in the cards? We had noted last March that Delek was looking to acquire a stake in either the Idku or Damietta liquefaction facilities as part of its drive to “broaden its export footprint.”

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