Tamar, Leviathan partners in talks to use EMG pipeline

Leviathan gas field Photo: Noble Energy

The partners are also exploring the option of using the pipeline they are building to Jordan for transporting gas on to Egypt.

The Tamar and Leviathan partners including Delek Drilling LP (TASE: DEDR.L) and Noble Energy Inc. (NYSE: NBL) are in talks with East Mediterranean Gas (EMG) to buy the rights to use their gas pipeline, which links Israel and Egypt via Sinai. The partners want to use the pipeline to convey gas from Israel to Egypt as part of the $15 billion deal signed two weeks ago with Egyptian company Dolphinus Holdings.

When the signing of the $15 billion gas export agreement was reported last month, the partners stated that they planned commencing talks to buy the rights to use EMG's pipeline. The partners see two other options for conveying the gas from Israel to Egypt: via Jordan; or commissioning Israel Natural Gas lines to build a new pipeline from Kerem Shalom near the Egyptian border.

It is unclear today how much EMG is worth after Israel's investment institutions wrote off their investment in the company following the cessation in the flow of gas from Egypt to Israel in 2012. The value of EMG, however, has certainly risen after an Egyptian court last month ordered Egyptian gas companies to pay EMG $1 billion in compensation for the termination of the gas contracts in 2012.

In addition, the Tamar partners announced this morning that "all the contingent conditions for the agreement with Jordan" have been met and that construction continues of a gas pipeline with a 10 billion cubic meters capacity, which could link up to a pan-Arab pipeline and convey gas from Tamar and Leviathan to Egypt too. In other words, the Tamar and Leviathan partners are moving forward with two of the three options for transporting gas to Egypt.

Published by Globes [online], Israel business news - www.globes-online.com - on March 7, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Leviathan gas field Photo: Noble Energy
Leviathan gas field Photo: Noble Energy
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