Egyptian Foreign Minister Sameh Shoukry is arriving today on a visit to Israel, ending a nine-year period without any visits to the country by the Egyptian foreign minister. Talks about natural gas exports to Egypt and regional cooperation in building joint infrastructure for gas exports to Asia or Europe are scheduled.
Letters of intent for exports of Israeli gas to Egypt have already been signed. One deal was to have made possible the expanded development of the Tamar gas reservoir, and the second to facilitate the development of the Leviathan reservoir, because Egypt was regarded as the anchor customer for Leviathan. Several changes in the regional gas sector, however, have changed the situation completely, including Egypt's improving situation, the low level of global gas prices (the partial recovery in global oil prices has not affected gas prices), and the acquisition of British Gas by Royal Dutch Shell.
In addition, Eni, the partner of Union Fenosa in the gas liquefaction facility in Egypt, has discovered two large gas reservoirs in Egypt, thereby casting doubt on a deal between the parties. Nevertheless, even if exports of gas from Israel to Egypt are questionable, the two countries, together with Cyprus, are capable of building joint gas export infrastructure. Furthermore, interest in Egypt's gas sector could lead to renewed interest in the Israel gas sector.
Published by Globes [online], Israel business news - www.globes-online.com - on July 10, 2016
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