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'Most significant Israel-Egypt cooperation since peace deal'

In milestone, Israel starts exporting natural gas to Egypt

Jerusalem’s and Cairo’s energy ministries issue rare joint statement announcing implementation of estimated $19.5 billion deal to pump gas from 2 massive offshore gas fields

View of the Leviathan gas field gas processing rig near the city of Caesarea, on January 31, 2019. (Marc Israel Sellem/Pool)
View of the Leviathan gas field gas processing rig near the city of Caesarea, on January 31, 2019. (Marc Israel Sellem/Pool)

Israel has started pumping natural gas to Egypt from two massive offshore fields, marking a major milestone and a historic cooperation between the countries, according to a joint statement.

The move comes shortly after natural gas started flowing from the massive Leviathan gas field, and some seven years after Israel starting pumping gas from the nearby Tamar field.

Energy Minister Yuval Steinitz last month signed permits for the export of gas to Egypt, calling it “a historic milestone for the State of Israel.”

On Wednesday, Steinitz heralded “the start of the most significant cooperation ever between Israel and Egypt, in energy and the economy, since the peace treaty.”

Jerusalem’s and Cairo’s energy ministries issued the rare joint statement on Wednesday morning, calling the move “an important development that will serve the economic interests of both sides.

“The step will both enable Israel to export some of its natural gas to the region via Egypt’s gas liquefaction plants, and promote Egypt’s status as a regional gas hub,” the statement said.

An undated photo of Energy Minister Yuval Steinitz R) and Egyptian Petroleum Minister Tarek El-Molla speaking during a previous meeting of the Eastern Mediterranean Gas Forum, in Cairo, Egypt. (Israeli Energy Ministry/courtesy)

Steinitz and Egypt’s Petroleum Minister Tarek El-Molla were set to formally announce the move Wednesday at a meeting of the Eastern Mediterranean Gas Forum (EMGF), the statement added.

During the meeting, the energy ministers of Israel, Egypt, Italy, Greece, Cyprus, Jordan and the Palestinian Authority were expected to approve turning the EMGF into a regional organization, according to the statement.

Israel’s delegation has been working with the other countries to put together the EMGF’s treaty, which the ministers will sign, the statement said, “in what will be another significant step on the path to consolidating the organization and its activities.”

In the October deal, the partners in the Israeli fields signed a contract with the privately held Egyptian firm Dolphinus Holdings to transfer some 85 billion cubic meters (3 trillion cubic feet), to be supplied by both the Tamar and the Leviathan fields starting in 2020.

Signing the export permit in December, Steinitz said, “The export of gas to Egypt, from Leviathan and Tamar, is the most significant economic cooperation between Israel and Egypt since the signing of the peace treaty between the countries.”

One source in Israel’s energy industry estimated the value of the gas to be sold to Egypt under the updated contract at a total value of $19.5 billion, Reuters reported.

From right to left: In the front row, Energy Minister Yuval Steinitz, Greek Energy Minister Kostis Hatzidakis and Cypriot Energy Minister Yiorgos Lakkotrypis sign the EastMed pipeline agreement in the Greek capital Athens on January 2, 2020, while in the back row, Prime Minister Benjamin Netanyahu, Greek Prime Minister Kyriakos Mitsotakis and Cypriot President Nicos Anastasiades look on. (Haim Zach/GPO)

Gas began flowing from the mammoth Leviathan offshore natural gas field — the largest energy project in Israel’s history — on December 31, after the government gave a final go-ahead to Noble Energy and its partners to forge ahead with the project despite vocal protests from residents of Israel’s coastal region who are concerned about the pollution emitted by the rigs.

Located in the Mediterranean Sea 125 kilometers (77 miles) west of Haifa, the Leviathan field is estimated to hold 22 trillion cubic feet of recoverable natural gas, and a potential half a million barrels of oil, according to estimates provided by the partners in the field.

The Tamar field — Israel’s second largest find — started producing gas in 2013 and has been supplying the country. It holds some 10 trillion cubic feet of natural gas, half of the amount held in Leviathan.

These two fields, along with the smaller Karish and Tanin fields that are set to start production in 2021, are seen as a bonanza for a nation that has traditionally been starved of natural resources. They also provide a stable source of locally produced energy from four different fields, leading to a more secure supply that is enough to feed all of Israel’s electricity needs for decades.

The start of Leviathan production was making Israel a regional player in the energy industry, said Yael Ravia-Zadok, head of the Foreign Ministry’s Economic Diplomacy Division, speaking at the energy conference last month. This “energy diplomacy” means discourse about natural gas has become an integral part of the regional agenda, she said.

Shoshanna Solomon contributed to this report.

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