Noble Energy inks gas sales agreements for Tamar and Leviathan

Abu Dhabi Commercial Bank’s Monica Malik discusses Egypt’s natural gas trade and the country’s energy market

Abu Dhabi Commercial Bank’s Monica Malik discusses Egypt’s natural gas trade and the country’s energy market

Israel's Delek Group Ltd and Texas-based Noble Energy Inc have led both gas projects.

But Monday's gas deal, he said, indicates that Egypt may remain a gas importer.

Delek also revealed it was studying a number of alternatives to export the gas to Egypt, as it was also looking into holding talks with the East Mediterranean Gas Company. According to the deal, Delek Drilling will supply the Egyptian company 64 billion cubic meters of natural gas. -Israeli energy group, is seen in the Mediterranean sea, some 15 miles (24 km) west of Israel's port city of Ashdod, in this file picture taken February 25, 2013.

Israel has limited natural resources but in the past few years it has discovered major gas fields off its northern coast and is building the infrastructure needed to tap the gas. Another auction is scheduled for 2018.

Prime Minister Benjamin Netanyahu called the deal with the Egyptian firm "historic" and said it would yield billions for state coffers for the benefit of education, health and welfare.

"It is the first time since the signing of the peace agreements with Egypt and Jordan that there are big, significant, serious export deals between Israel and the Arab world", he told Army Radio.

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Egypt was once a net exporter of gas, but years of political instability and mismanagement, including deals which MEE has investigated, left it to import gas for its rising population.

On Feb. 13, the Egyptian cabinet issued the executive statute of a law issued in September 2017 to regulate the gas market, allowing private companies to operate in the field.

An Egyptian government official told Reuters the deal does not entail that Cairo will import natural gas; rather, "international private companies will import gas from overseas in the framework of their own needs, and will liquefy and export them again". The accord was signed during 2016 and the supply of the gas is expected to start by the end of 2019, the companies said in the statement. However, they are looking at using a pipeline that previously.

Noble and Delek Drilling together control 85 percent of Leviathan, with the rest held by Ratio Oil.

Indeed, the export agreements are pending a number of conditions, including regulatory approvals from Israel and Egypt, such as import and export permits. The natural gas is anticipated to supply industrial and petrochemical customers as well as future power generation in Egypt.

They are joined in Tamar by Isramco Negev, Tamar Petroleum - a spin-off of Delek - and two other smaller partners.

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