One of the developers of a natural gas field off Israel’s Mediterranean coast on Sunday said it has signed a letter of intent to provide gas to a facility in Egypt.
Delek Drilling said it is negotiating a deal to provide seven billion cubic meters of natural gas from the offshore Leviathan gas field to British company BG’s plant in Idku, Egypt, through an underwater pipeline annually for 15 years.
An industry official familiar with the deal said it could be valued at about $30 billion — which would be the largest energy deal in Israel’s history. He spoke on condition of anonymity because he was not authorized to comment on the deal.
Until recently, Egypt provided natural gas to Israel. But following the ouster of President Hosni Mubarak in 2011, supplies were disrupted and eventually halted.
Last month, Houston-based Noble Energy Inc., one of Delek’s partners, reached a preliminary deal to sell up to 2.5 trillion cubic feet of gas annually over 15 years to Union Fenosa Gas SA for its liquefied natural gas facility in Egypt.
Despite a long history of geopolitical conflict with its Arab neighbors, the discovery of large natural gas deposits off its coast has positioned Israel to become a leading energy exporter in the region.
Earlier this year, Noble Energy and its partners signed a deal with Arab Potash Co. and Jordan Bromine Co. in Jordan, and another deal with a Palestinian power company to supply gas to a power plant to be built in the West Bank.
Israel has long relied on imports to meet most of its energy needs. The gas fields are expected to supply Israel’s domestic needs for decades and could transform the country into an energy exporter.
Copyright 2014 The Associated Press
The Times of Israel covers one of the most complicated, and contentious, parts of the world. Determined to keep readers fully informed and enable them to form and flesh out their own opinions, The Times of Israel has gradually established itself as the leading source of independent and fair-minded journalism on Israel, the region and the Jewish world.
We've achieved this by investing ever-greater resources in our journalism while keeping all of the content on our site free.
Unlike many other news sites, we have not put up a paywall. But we would like to invite readers who can afford to do so, and for whom The Times of Israel has become important, to help support our journalism by joining The Times of Israel Community. Join now and for as little as $6 a month you can both help ensure our ongoing investment in quality journalism, and enjoy special status and benefits as a Times of Israel Community member.