Pipeline deal for Israeli gas exports to Egypt near completion

Leviathan gas reservoir / Photo: Albatros
Leviathan gas reservoir / Photo: Albatros

The EMED venture is buying rights in the EMG pipeline, which will carry gas to Egypt from the Tamar and Leviathan reservoirs in Israel.

Delek Drilling LP (TASE: DEDR.L) announced today that no preconditions remain to be fulfilled for the deal whereby together with its partners in the EMED venture, Noble Energy and EGAS (Egyptian Natural Gas Holding Company), it will buy the rights to operate the gas pipeline to Egypt from the partners in EMG (Eastern Mediterranean Gas Company).

Within the past few days, the partners in EMED transferred the entire sum of the consideration to the trustees, and the shares in EMG that are being sold were transferred from the sellers to EMED. Once the consideration is transferred by the trustees to the sellers, which is expected to occur within the next few days, the EMG deal will be complete, enabling gas to flow to Egypt from the Leviathan and Tamar gas reservoirs in Israel.

EMED, in which Delek Drilling holds 25%, Noble Energy 25%, and EGAS 50%, is buying 39% of the rights in the EMG pipeline for $520 million.

The undersea pipeline has a diameter of 26 inches and is 90 kilometers long. It leads from the Israeli gas transport system in the Ashkelon area to the Egyptian system at El-Arish. The pipeline is planned to have a capacity of 7 BCM a year, with the possibility of an upgrade to 9 BCM a year with additional systems. Technical tests on the pipeline, including reverse flow tests, have found it to be completely fit for the transport of gas from Israel to Egypt.

The EMG pipeline will allow the start of supply of gas from Tamar and Leviathan under a contract with Egyptian company Dolphinus Holdings, starting on January 1, 2020, in quantities expected to grow to 7 BCM annually.

Published by Globes, Israel business news - en.globes.co.il - on November 3, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Leviathan gas reservoir / Photo: Albatros
Leviathan gas reservoir / Photo: Albatros
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