Egypt-Israel Gas Deal: Pipeline Capacity Issue Casts Shadow over Gas Export Agreement

Egypt-Israel Gas Deal: Pipeline Capacity Issue Casts Shadow over Gas Export Agreement

Israel’s domestic pipeline infrastructure does not have the capacity to transfer the contracted quantities of natural gas from the Tamar and Leviathan fields to Egypt, sources told Hebrew language business daily TheMarker (via Haaretz).

The Israeli pipeline, which belongs to Israel Natural Gas Lines (INGL) company, has an annual carrying capacity of 2 to 3 billion cubic meters (bcm), sources told TheMarker.

However, Israel’s Delek-led consortium are contracted to sell 3.5 bcm/y to Egypt under the terms of the agreement, signed with Egypt’s Dolphinus Holdings in February 2018.

The latest news throws into doubt comments made by Mohamed Shoeib, CEO of East Gas Company, who said last month that Egypt may begin receiving Israeli gas as early as March 2019. Shoeib told Bloomberg that Egypt will receive 100 million standard cubic feet per day (mmscf/d) in Q1 2019 and this will gradually increase to 700 mmscf/d.

Delek, Texas-based Noble Energy and the Egypt East Gas company agreed in September to purchase a stake in the EMG pipeline, which connects the Israeli port city of Ashkelon to El Arish on Egypt’s North Sinai coast. However, neither the Tamar or the Leviathan field is connected to EMG, and the consortium must now deliver the gas through the INGL network.

Delek Drilling told the Tel Aviv Stock Exchange last week that the companies were currently in negotiations with INGL but did not mention any capacity issues.

 

 

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Sarah Samir 3751 Posts

Sarah has been writing in the oil and gas field for 8 years. She has a Bachelor Degree in English Literature. She has three years of experience in the banking sector.

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