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Thursday, 25 July 2019

Israeli partners working on amending gas export agreement with Dolphinus

Israeli gas partners want to amend their export agreement with Egypt: Israeli gas partners Noble Energy and Delek Drilling are looking to tweak their USD 15 bn natural gas export agreement with Egypt to allow them to reach peak undisrupted supply levels later than initially agreed, Delek CEO Yossi Abu said on a call with investors yesterday, according to Bloomberg. Under the current stipulations of the contract, Noble and Delek would export 7 bcm annually by 2020, with half of that amount subject to potential interruptions during peak times or under adverse conditions. The Israeli partners are now looking to supply about 4.5 bcm of non-interruptible gas next year and reach 7 bn “later,” according to Abu. People familiar with the matter told Bloomberg that they are considering ramping up exports to 5.5 bn in 2021 and 7 bn in 2022.

Israeli gas exports to Egypt shall begin within four months, Israeli Energy Minister Yuval Steinitz told Reuters. An agreement to buy stakes in the East Mediterranean Gas Company’s pipeline between Ashkelon in Israel and El-Arish in Sinai will be completed “within weeks” and more connections could be built between them, according to Steinitz.

Background: Delek and its US-based partner Noble Energy partnered together last year with other Israeli energy companies to form the Tamar Gas Consortium. The consortium then signed a USD 15 bn agreement to supply Alaa Arafa-led Dolphinus Holding with gas from each of the Leviathan and Tamar gas fields. Trial shipments from Israel’s Tamar and Leviathan gas fields were originally supposed to come in March of this year, but capacity restrictions posed by Israel’s domestic pipeline network meant that the imports had to be delayed. Delek then announced last month that it would begin commercial natural gas sales to Egypt by the end of June. According to Steinitz, the holdup was a result of Israel’s “complex regulatory regime,” but tells Reuters that the causes for delay are mostly resolved.

Meanwhile, everyone is gearing up for the East Med Gas forum today. Oil Minister Tarek El Molla met yesterday with US Secretary of Energy Rick Perry, who will be attending the forum as a monitor, and discussed increasing cooperation and US investments in Egypt, according to Mubasher. El Molla also met with Greek Energy Minister Konstantinos Hatzidakis to discuss cooperation, according to State Information Service (SIS).

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