Israel's $15 Billion Gas Deal With Egypt a 'Historic Agreement': Netanyahu

Egypt’s petroleum ministry Tarek El Molla

Egypt’s petroleum ministry Tarek El Molla

Texas-based Noble Energy announced a new deal that will supply Egypt with natural gas from pumped from fields in Israel, according to a report by The Dallas Morning News.

The price for the natural gas to be imported from Israel under the two agreements will be determined by a "price formula linked to the price of Brent oil barrel", the statement read. Delek and Noble Energy are developing the Leviathan and Tamar gas fields.

"It is the first time since the signing of the peace agreements with Egypt and Jordan that there are big, significant, serious export deals between Israel and the Arab world", he told Army Radio.

The "historic agreement" has been welcomed by Prime Minister Benjamin Netanyahu.

Israeli drilling company Delek Drilling and its United States partner Noble Drilling announced Egyptian firm Dolphinus would buy around 64 billion cubic meters (2.26 trillion cubic feet) of gas over a decade.

He noted that the ministry will deal with any permission requests from private sector gas companies in accordance with the declared rules that stipulate that Egypt is aiming to become a regional hub for gas trade and circulation.

Egypt passed a New Natural Gas Law previous year that allows for competition in the market by granting licenses to import gas for private companies.

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The partners have also been trying to finalize a long-term deal to supply a Royal Dutch Shell Plc plant in Egypt. For Tamar, we now have a contract to sell any excess gas beyond current customer needs in Israel and Jordan to Egypt.

But he says it could help pave the way toward turning Egypt into an export hub for Israeli gas.

Noble Energy, which plans to sell its US offshore exploration business, said the prices under the agreements were linked to the Brent oil benchmark, and promised more details when it releases results on Tuesday.

Leviathan, located about 80 miles (130 km) west of Haifa, was discovered in December 2010 and is scheduled to start producing by the end of 2019. Therefore, the $15 billion will come in the form of returns from exporting the natural gas to Europe via Egypt.

The area from Cyprus to Lebanon and Egypt may contain additional gas riches, and countries in the region are eager to develop export plans.

Indeed, the export agreements are pending a number of conditions, including regulatory approvals from Israel and Egypt, such as import and export permits.

Israeli energy company Delek Drilling has announced a $15 billion deal to supply natural gas to Egypt. Isramco Negev 2 LP holds a 28.75% stake in Tamar.

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