East CEO: Israel to export gas to Egypt by March

Leviathan gas field Photo: Noble Energy

EMG partner East CEO Mohammed Shoeib has told "Bloomberg" that Delek and Noble plan to begin exporting gas to Egypt in the first quarter of 2019.

Delek Group Ltd. (TASE: DLEKG) unit Delek Drilling LP (TASE: DEDR.L) and Noble Energy Inc. (NYSE: NBL) could begin exporting natural gas to Egypt by the first quarter of 2019, East Gas Co. CEO Mohammed Shoeib has told "Bloomberg."

East is the Egyptian partner of Delek and Noble, which has acquired a 39% stake in the East Mediterranean Group (EMG) pipeline between Israel and the Sinai. “We expect the pipeline is in good condition,” Shoeib told Bloomberg. “We aim to reach the pipeline’s full capacity or maximum flow rate within three years.”

Shoeib expects supplies to begin at 100 million cubic feet per day by March and rise to 700 million cubic feet per day when operating at full capacity. Delek and Noble have signed a deal with Egypt's Dolphinus Holdings to supply 64BCM of gas worth an estimated $15 billion over the next 10 years from the Tamar and Leviathan fields.

EMG is set to test the pipeline before modifying facilities to reverse the flow, Shoeib told "Bloomberg" in his first public comments since the deal was announced. He expects the testing procedures to take three to four months.

Egypt stopped supplying gas to Israel in 2012 due to a domestic gas shortage and repeated attacks by Islamist militants on the pipeline in the Sinai. Consequently, Egypt was embroiled in arbitration cases with some of EMG’s owners, which threatened to delay the export plans. But these have been settled.

Shoeib said, “It’s a win-win situation. It also sends the message to international investors that Egypt is able to settle disputes and create a good investment climate.”

“We are not worried about the security issue,” said Shoeib, who headed Egypt’s state gas company EGAS when the country decided to halt its exports. “We’re confident that the army and police have secured the area well.”

Egypt has become self-sufficient in gas since the discovery of the huge Zohr field but it has large liquefaction plants with major capacity to convert natural gas into LPG and re-export it to Asia.

Published by Globes [online], Israel business news - en.globes.co.il - on October 9, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Leviathan gas field Photo: Noble Energy
Leviathan gas field Photo: Noble Energy
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