The partners in the Leviathan gas discovery, Ratio Oil Exploration (1992) LP (TASE:RATI.L), Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling, along with US company Nobe Energy, report this morning that a non-binding letter of intent has been signed between Leviathan and Egyptian company Dolphinus Holdings in which the sides confirmed their intention of negotiating an agreement for the supply of gas from Leviathan to Dolphinus via the existing gas pipeline operated by EMG in Egypt.
The basis for negotiations is an estimated supply of not more than 4 BCM (billion cubic meters) of gas annually for 10-15 years.
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.
According to the report, the price of the gas that will be set will be similar to prices in other agreements for the export of gas from Israel to regional markets, and will be linked to the price of Brent crude oil, including a floor price.
In March this year, the partners in Israel's Tamar field signed a NIS 5 billion contract for the supply of 5 BCM of gas to Dolphinus over three years.
Delek Drilling chairman and Avner CEO Gideon Tadmor said, "The agreements to supply Israeli gas to Jordan and Egypt are the embodiment of the economic peace. The gas discoveries will make it possible for Israel to strengthen its ties with neighboring countries and to affect the lives of millions of citizens throughout the region. We continue to be committed to developing the Leviathan discovery and the project to expand Tamar, with the aim of creating energy security for Israel and its neighbors."
Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2015
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