Israel will start exporting gas to Egypt from January 2020.
In a regulatory filing in Tel Aviv, Israel’s Delek Drilling stated, shares have been transferred to buyers in a joint venture called EMED between Texas-based Noble Energy and Delek wherein Egyptian East Gas Co has agreed to purchase a 39% stake in the subsea EMG pipeline for $518 million. The deal will enable Israel to export gas to Egypt.
According to the companies, the deal is expected to be closed in the next few days.
“Upon the transfer of the full amount of the consideration to the sellers, which is expected to be performed in the coming days, the EMG transaction will be closed in practice,” said Delek.
Last year, partners in Israel’s Leviathan and Tamar offshore gas fields had agreed to sell $15 billion worth of gas to Dolphinus Holdings, a customer in Egypt, but last month the deal was amended to boost supply by 34% to about 85 billion cubic meters, which amounts to $20 billion.
Incidentally, Delek and Noble are key partners in Leviathan, which is set to start production in the coming weeks, as well as in the existing Tamar field off Israel’s Mediterranean coast.
“The closing of the EMG transaction marks the dawn of a new era for the Israeli energy market – Israel’s transition to the status of a regional natural gas exporter,” said Yossi Abu, CEO of Delek Drilling.
“The Leviathan project is moving ahead on schedule … and we expect to begin piping the gas from Leviathan already before the end of the year.”
Israel’s gas supply deal with Egypt is set to start in January.
The EMG pipeline has a planned capacity of around 7 bcm per year, with a possibility of increasing that to around 9 bcm per year via the installation of additional systems.
With the news reaching the market, shares of Delek Drilling’s rose by 6.1% in Tel Aviv.