Egypt, Cyprus sign gas pipeline agreement

Leviathan gas field Photo: Noble Energy

The deal has raised speculation that Israel's Leviathan field, close to Cyprus's Aphrodite, will link up to Egypt via Cyprus.

Egypt and Cyprus have signed an agreement for the laying of an underwater pipeline between the two countries. The deal was signed by Cypriot Energy Minister Yiorgos Lakkotrypis and Egypt’s Oil Minister Tarek el-Molla, the Cyprus Mail reports.

Lakkotrypis said that the agreement ensured the timely and safe development, construction, and operation of an underwater pipeline directly to Egypt through the two countries’ exclusive economic zones.

The underwater gas pipeline will link Cyprus's Aphrodite gas field with Egypt's LNG (liquid natural gas) facility in Idku, from where it could be exported to the Far East. The Aphrodite field is owned by Delek Group Ltd. (TASE: DLEKG) (30%), Noble Energy (35%) and Shell (35%).

The big question now is whether Aphrodite will be linked to Israel's Leviathan offshore field, which is close to where the Israeli and Cypriot Exclusive Economic Zones (EEZ) meet. The distance between Aphrodite and Leviathan is just 30 kilometers and Delek and Noble Energy together hold a majority stake in both fields. Delek holds 45% of Leviathan, Noble Energy has 40% and Ratio Oil Exploration (1992) LP (TASE:RATI.L) holds 15%.

The estimated 120 BCM in Aphrodite's field would not seem to justify construction of the pipeline, whereas Leviathan has reserves of 450 BCM. Moreover, Leviathan has already signed an agreement to supply Egypt's Dolphinus with $15 billion of natural gas over 10 years.

“The energy reserves in the Mediterranean basin can act as a catalyst for further co-operation in the area,” el-Molla said.

Published by Globes [online], Israel business news - www.globes-online.com - on September 20, 2018

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

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