A question mark has arisen over the deal for the sale of gas from Israel's Leviathan reserve to Egypt. EMG (East Mediterranean Gas Company), which operates the gas pipeline between Egypt and Israel that is supposed to be used to transport gas under the agreement between the Leviathan partners and Egyptian company Dolphinus Holdings, says that it has no knowledge of such a deal or even of negotiations towards one.
"EMG is not a party to and is not aware of the deal reported between the Leviathan partners and Dolphinus or any other third party, and it has not participated in any such negotiations," the company stated, "For the removal of doubt, no talks are taking place between EMG and Dolphinus on such a deal and there have been no negotiations on the matter in the past. EMG protests forcefully against the repeated use of its name without its consent, which is apparently intended to serve the interests of third parties."
Nonetheless, sources close to the Leviathan partnership say that "this is another move in Yossi Maiman's battle in the arbitration in which he is involved against the Egyptian government, and it does not represent the generality of EMG's shareholders."
Yosef (Yossi) Maiman, formerly controlling shareholder in Ampal-American Israel Corporation, which holds a 12.5% stake in EMG, is attempting to obtain compensation from the government of Egypt for the cancellation of the contract to supply Egyptian gas to Israel.
The sources added: "Dolphinus has signed a letter of intent with most of the shareholders in EMG, and as we speak a meeting is being held in London between representatives of Dolphinus and of EMG on using the gas pipeline."
Last week, with very surprising timing (at the height of the battle over the gas agreement between the Israeli government and the gas exploration companies and at the start of the discussion on the agreement in the Knesset Economic Affairs Committee), the Leviathan partnership announced a non-binding understanding for the sale of gas from Leviathan to Egypt amounting to up to 4 billion BCM annually for 10-15 years. According to the announcement, the intention is to transport the gas via the Israel Natural Gas Lines system to Ashkelon and from there to Egypt via EMG's pipeline.
Dolphinus insists it has the agreement of at least one of EMG's major shareholders. The company said, "Since the signing of the first GSPA with Tamar partners, Dolphinus Holding has been engaged into serious discussions with all the involved parties to ensure the successful completion and the flow of gas. We have approached several times EMG the gas pipeline owner and its several shareholders in order to use the EMG pipeline from Israel to Egypt. Dolphinus has already reached a preliminary agreement with one of the key shareholders of EMG that advances the use of the pipeline to flow gas from Israel to Egypt. We are committed to flow the gas as soon as possible and we believe that such huge business opportunity would benefit all the involved stakeholders."
The letter of intent was welcomed my Minister of National Infrastructures, Energy and Water Yuval Steinitz.
Published by Globes [online], Israel business news - www.globes-online.com - on November 30, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015