Israeli gas exports to Egypt expected to commence this month

Israeli energy company Delek Drilling expects to commence commercial gas exports to Egypt by the end of the month, according to a senior company official.

“We are continuing the technical testing of the pipeline as planned, and hope we will be able to deliver natural gas commercially to Egypt by the end of June,” deputy chief executive Yossi Gvura told Reuters on Sunday.

In February 2018, Delek Drilling and Houston-based Noble Energy Inc. signed a $15 billion decade-long deal to supply 64 billion cubic meters of natural gas to Egypt from the Tamar and Leviathan gas fields, located off Israel.

Also last year, the companies and Egyptian partner East Gas agreed to acquire a 39% stake in East Mediterranean Gas S.A.E., owners of the dormant 90 km.-long EMG gas pipeline connecting the Israeli gas network from Ashkelon to the Egyptian network near El-Arish.

The $518m. deal enables the companies to operate the gas pipeline, which has lay dormant since 2012 when Egypt ended cut-price exports to Israel after supply shortages and repeated terrorist attacks on the pipeline infrastructure.

Initial gas delivery through the EMG pipeline linking the Israeli and Egyptian networks is expected to occur from the already-operational Tamar field, located 80 km. off the shore of Haifa, to Dolphinus Holdings Limited in Egypt.

Once the Leviathan field, situated 130 km. from Haifa, becomes operational by the end of 2019, the partners expect to sell at least 9.91 million cu.m. of natural gas per day to contracted customers in Egypt.

On Sunday, Hebrew-language media reported that Delek Drilling and Noble Energy have commenced examining the pipeline ahead of the initial gas flow, checking the pipe’s condition and its ability to maintain the necessary high pressure of gas needed for transportation.

The deal to supply Egypt follows a September 2016 agreement worth $10b. between Jordan’s National Electric Power Company Ltd. and the operators of the Leviathan gas field to supply a gross quantity of 45 billion cu.m. of natural gas to Israel’s eastern neighbors over a 15-year period.

A large gas pipeline to Jordan from Leviathan is currently under construction.