A group of private customers in Egypt have agreed to buy at least US$1.2 billion of natural gas from Israel's offshore Tamar field via an old pipeline built to send gas to Israel.
The Tamar partners said on Wednesday that they have signed a seven year deal with Dolphinus Holdings, a firm that represents non-governmental, industrial and commercial consumers in Egypt, that calls for a minimum 5 billion m3 of gas to be sold in the first three years.
One energy source in Israel, however, said the total export amount in the deal could be more than three times higher, depending on demand in Egypt, which is facing an energy crisis.
The supplies will pass through a subsea pipeline constructed nearly a decade ago by East Mediterranean Gas (EMG), the company that oversaw a now-defunct Egyptian-Israeli natural gas deal. Egypt had been selling gas to Israel in a 20 year agreement, but the deal collapsed in 2012 after months of attacks on the pipeline by militants in Egypt's Sinai Peninsula. It has since been out of commission and EMG is suing the government of Egypt for damages.
Recent offshore discoveries such as Tamar, with an estimated 280 billion m3 of gas, and Leviathan, which is more than twice as big, have turned previously import-dependent Israel into a potential energy exporter.
Texas-based Noble Energy is the field’s operator.
The Dolphinus deal is subject to regulatory and other approvals in Israel, Egypt and from the East Mediterranean Gas Company (EMG).
Edited from various sources by Elizabeth Corner
Sources: Rigzone, Jewish Press