Israel will start exporting natural gas to Egypt this year

An agreement between the two countries and a US-based oil and gas exploration firm is said to be valued at $15bn.

Israel Foreign Minister Steinitz in Istanbul, 2016
Earlier this year Israel's foreign minister Yuval Steinitz stated roughly half of his country's gas exports to Egypt would be used for the country's domestic market [Osman Orsal/Reuters]

Israel will begin exporting natural gas to Egypt in November, with volumes eventually set to reach seven billion cubic metres a year, Israeli Energy Minister Yuval Steinitz told reporters in Cairo on Thursday.

The supplies will mark the start of a $15bn export agreement between Israel’s Delek Drilling and US-based partner Noble Energy with an Egyptian counterpart in what Israeli officials called the most significant deal to emerge since the neighbours made peace in 1979.

The deal signed early last year will bring natural gas from Israeli offshore fields Tamar and Leviathan into the Egyptian gas grid.

Testing of the gas pipeline from Israel to Egypt has been completed, Steinitz told reporters on the sidelines of a regional gas forum in Cairo.

Egypt hopes to leverage its strategic location and well-developed infrastructure to become a key international trading and distribution centre for gas.

Steinitz said in January Israeli exports to Egypt were expected to reach seven billion cubic meters a year over 10 years, and about half the exports were expected to be used for Egypt’s domestic market and the other half to be liquefied for re-export.

Separately, a plan to develop the Aphrodite gas field in Cyprus will be finalised within the next few weeks, Cypriot Energy Minister Georgios Lakkotrypis told reporters in Cairo.

This plan will include extending a gas pipeline to Egypt, he added.

Cyprus expects initial natural gas production from the Aphrodite field will begin between 2024 and 2025.

The Aphrodite field was first discovered in 2011, but production has been delayed since, as stakeholders Noble Energy, Israel’s Delek Drilling and Royal Dutch Shell renegotiated a production-sharing agreement with the government.

There has been a flurry of successful exploration efforts in recent years that identified natural gas reserves in the eastern Mediterranean, where gas output has begun to soar.

Eastern Mediterranean countries including Cyprus, Israel, Egypt, and Italy have formed a partnership to deliver more natural gas to Europe and transform the region into a major energy hub.

Source: Reuters