Israel Starts Exporting Natural Gas to Egypt

Andrew Cummings
January 17, 2020

The Leviathan undersea natural gas field, located off the northern Israeli port city of Haifa, went online on Wednesday, pumping gas to Egypt as per a mutual agreement and engineering project between Israel and Egypt.

A private firm in Egypt, Dolphinus Holdings, will purchase 85 billion cubic meters (bcm) of gas, worth an estimated $19.5 billion, from Israel's Leviathan and Tamar offshore fields over 15 years.

Energy Minister Yuval Steinitz said in a video released on Twitter that it was "a moment for celebration, in which Israel turns into a regional energy power".

In a joint statement, Egypt's petroleum ministry and the Israeli energy ministry hailed an "important development that serves the economic interests of both countries".

Under the pact, Israeli gas will be processed at Egyptian liquefied natural gas factories before being exported to Europe.

Millions of dollars that Cairo owed in legal settlements over an earlier deal mired in corruption have been forgiven as a result of the deal, which marks the latest chapter in a saga that has seen Israeli and Egyptian gas fortunes rise and fall - and at times left Israelis and Egyptians in the dark and fuelled protests.

The pact "is the result of strenuous work, and a lot of determination and courage on the part of leaders on both sides", said Delek Drilling's chief executive officer, Yossi Abu.

The Israel-Egypt gas deal went into effect shortly after another deal between Israel and Jordan was put into motion.

Cyprus too has made significant finds and has plans to pump its gas to Egypt for liquefaction and re-export to Europe.

The North African state hopes to become a regional gas hub.

Gas began flowing from the mammoth Leviathan offshore natural gas field - the largest energy project in Israel's history - on December 31, after the government gave a final go-ahead to Noble Energy and its partners to forge ahead with the project despite vocal protests from residents of Israel's coastal region who are concerned about the pollution emitted by the rigs.

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