Egypt’s president says his country “scored a goal” by signing a $15 billion deal with an Israeli company to get natural gas that will help turn Egypt into a regional energy hub.
Abdel-Fattah el-Sissi said in televised comments on Wednesday that the project “has a lot of advantages” for Egyptians.
Delek Drilling and its US partner, Noble Energy, signed the agreement on Monday to sell a total of 64 billion cubic meters of gas over a 10-year period to Egyptian company Dolphinus Holdings. The gas is expected to start flowing next year.
On Monday, the partners in Israel’s Tamar and Leviathan natural gas fields, including a unit of US Noble Energy Inc and Delek Drilling LP, signed $15 billion in deals to export natural gas to Egypt over 10 years.
In a filing to the Tel Aviv Stock Exchange, Delek Drilling LP announced that Noble Energy Mediterranean and its partners in the fields signed accords with Egypt’s Dolphinus Holdings Ltd. for the sale of some 64 billion cubic meters of natural gas from the two fields.
One accord calls for the sale of 3.5 BCM of natural gas annually from the Leviathan field, for a total of 32 BCM, the filing said, with the partners estimating the total revenues from the sale from the Leviathan field to reach $7.5 billion.
In addition, the partners said they signed an additional accord for the sale of natural gas from the Tamar field, for a total of 32 BCM and some $7.5 billion.
Supply from Tamar will start as soon as the infrastructure for its transport is in place, the companies said, while that from Leviathan will start as soon as production starts from the well. Supply will continue until the amounts agreed upon are supplied or until December 2030, whichever comes first, the companies said.
Prime Minister Benjamin Netanyahu called the deal with the Egyptian firm “historic” and said it would yield billions for state coffers for the benefit of education, health and welfare.
Delek said the partners were considering various options for the supply of the gas to Egypt, including via a Jordanian-Israeli pipeline that is currently being built or the use of the existing East Mediterranean Gas pipeline. Delek Drilling and Noble plan to start negotiations with EMG for the use of the pipeline to Egypt, the companies said in a separate, emailed statement.
Egypt was the first Arab country to make peace with Israel, in 1979, but past economic agreements have been controversial in the Arab world’s most populous country, where popular support for Palestinians runs high.