Gas partners try to keep BG, Union Fenosa deals alive

Tamar

Senior Tamar partners executives sought to reassure BG and Union Fenosa that gas exports are still on the agenda

Senior executives in Tamar partners Delek Group Ltd. (TASE: DLEKG) and Noble Energy last week flew to meetings with representatives of Spanish company Union Fenosa, which has a natural gas liquefaction facility in Damietta, Egypt, sources inform "Globes." From there, they traveled to London to meet with BG, which owns a liquefaction facility in Idku, Egypt. The meetings were designed to reassure the Union Fenosa and BG that gas exports from the Tamar and Leviathan reservoirs are still on the agenda.

Since Israeli Antitrust Authority director general Prof. David Gilo decided to break up the Leviathan monopoly, the energy industry in Israel has come to a standstill. Last week, Gilo decided to postpone his decision on whether Delek Group and Leviathan acted illegally in taking control of the Leviathan reservoir, and thereby created an agreement in restraint of trade. Meanwhile, the state is trying to reach a compromise that the partners will accept.

Egypt, however, is not waiting for Israel; it is expediting the development of its own gas sector. Among other things, Egypt imports liquefied natural gas (LNG). Last week, Egyptian Minister of Energy Mohamed Shaker announced last week that by 2020, Egypt would no longer need to import LNG. At the same time, Egypt announced has announced in recent months that it had issued new gas exportation licenses, and had raised the price of gas for its domestic economy.

Egypt hopes thereby to attract international companies to drill in its territory. Given the delay in Israel's gas development and the acceleration in the Egyptian gas sector, the deals involving the Tamar and Leviathan partners are in jeopardy. The deal in question is for exporting 70 BCM from Tamar and 105 BCM from Leviathan.

Published by Globes [online], Israel business news - www.globes-online.com - on March 1, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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