Israel on Sunday signed a memorandum of understanding with a company representing nongovernmental consumers in Egypt, under which the offshore Tamar gas field would supply up to 2.5 billion cubic meters of natural gas per year for the next seven years.
The arrangement with the Dolphinus Holdings company is estimated at some $500-700 million a year, according to TheMarker, Haaretz’s financial newspaper. The Globes business daily, however, reported that the agreement includes a clause that allows the supplier to cut the gas exports with little notice. Due to the flexible arrangement, the Egyptian company did not commit to purchasing a minimum amount, while Tamar agreed to supply a minimum of 5 BCM of natural gas over the next three years.
The gas will be transferred via the Israel Natural Gas Lines through the East Mediterranean Gas Company pipeline, which has been damaged by Islamist groups in the Sinai peninsula in the past few years.
Up until 2012, when its gas pipeline was destroyed and a 20-year deal terminated, Egypt had supplied Israel with natural gas. However, recent discoveries of its natural resources off the coast of Israel have ended Jerusalem’s dependence on Egyptian companies.
In early September, Israel signed a memorandum of understanding with Jordan to supply the Hashemite kingdom with $15 billion worth of natural gas from its Leviathan energy field over 15 years.
The Jordanians turned to Israel because their supply of natural gas from Egypt had been halted by repeated terrorist attacks on the gas pipeline from Egypt, a Channel 2 report said.
Israel decided last year to export 40 percent of the country’s offshore gas finds, and has since signed a 20-year, $1.2 billion deal with a Palestinian firm, and in June signed a letter of intent to supply energy to an Egyptian facility as well.
In March 2013, Israel began pumping natural gas from the Tamar deposit, which, discovered in 2009 and located some 90 kilometers (56 miles) west of Haifa, which holds an estimated 8.5 trillion cubic feet of natural gas.
In addition to Tamar, in 2010 an even larger deposit, Leviathan — which boasts an estimated 16-18 trillion cubic feet of gas — was discovered 130 kilometers (81 miles) west of Haifa. It is expected to become operational in 2016.
The finds are expected to transform Israel from an energy importer to a major world player in the gas market.
Times of Israel staff contributed to this report.