Delek Group announced in a press release the signing of a Letter of Intent to export natural gas from the Leviathan Project to Egyptian consumers.
The preliminary deal is for 15 years, and includes pumping the gas to Egypt through the existing Arab Gas Pipeline, owned by EMG, reported Reuters.
Leviathan, which is expected to begin production in 2019 or 2020, will supply Egypt’s Dolphinus Holdings with up to 4 bcm of gas a year, the companies said in a statement to the Tel Aviv Stock Exchange.
Dolphinus is a company that represents non-governmental, industrial and commercial consumers in Egypt.
“We have worked with Dolphinus before and we expect to reach a final agreement quickly,” said Yossi Abu, Chief Executive of Israel’s Delek Drilling.
The price of gas is said to be similar to other contracts, linked to the cost of Brent oil, and includes a floor price.
Development of Leviathan, which holds an estimated 622 bcm of gas, is being led by Texas-based Noble Energy and Delek Group through its units Delek Drilling and Avner Oil and Gas.
According to Ahram Online the new deal, which is still subject to numerous approvals, would not affect negotiations between Leviathan’s partners and Britain’s BG Group on a potential supply deal to BG’s liquefied natural gas plant in Iduku, Egypt.
Egypt recently began allowing private companies to import their own needs of natural gas, pending approval from the recently launched Gas Regulatory Authority.