Ampal: EMG accounts for 30% of Egypt’s gas revenue

EMG currently delivers two billion cubic meters of gas a year, indicating that its annual EBITDA is $100 million.

East Mediterranean Gas Company (EMG) sales of gas to Israel accounts for 30% of Egypt’s total gas revenue, EMG shareholder Ampal-American Israel Corporation told investors. Ampal, controlled by Yosef Maiman, owns 12.5% of EMG.

EMG sells gas to Israeli customers that it purchases from the Egyptian National Gas Company (EGAS). EMG currently has contracts worth over $15 billion with Israel Electric Corporation (IEC), Israel Corporation, and other customers.

The price of natural gas in the IEC contract is reportedly $4-4.50 per million British Thermal Units (mmbtu), and the price in the more recent contract with Israel Corp., signed in December 2010, is reportedly $4.50-5 per mmbtu.

Last week, in a presentation to investors, Ampal said that EMG estimated revenue on seven billion cubic meters of natural gas sales per year exceeds $1 billion and its earnings before interest, taxes, depreciation and amortization (EBITDA) of $350 million. A calculation by “Globes” shows that this amounts to $50 million per billion cubic meters, or $1.40 per mmbtu.

EMG currently delivers two billion cubic meters of gas a year, indicating that its annual EBITDA is $100 million. The EBITDA figure does not include amortization for the pipeline that EMG built or its financing expenses on loans. The figures do include current expenses, such as salaries.

Maimon’s Merhav Group said, “The figure of $1.40 per mmbtu is incorrect. It is mere speculation.”

Hussain Salem owns 28% of EMG, Egyptian Natural Gas Holding Company owns 10%, Thai energy giant PTT Public Co. Ltd. owns 25%, Yosef Maiman owns 20.6% through Ampal and his private company Merhav MNF Ltd., and Israeli institutional investors own 4.4%.

(Source: globes)

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