Israel's Tamar group looks to sell gas to Egypt via EMG pipeline
Sun, 19/10/2014 - 15:26
http://www.egyptindependent.com//news/israel-s-tamar-group-looks-sell-gas-egypt-emg-pipeline

The partners in Israel's offshore Tamar gas field said on Sunday they are
negotiating the sale of at least 5 billion cubic metres (bcm) of gas over
three years to private customers in Egypt via an old pipeline built to send
gas in the other direction.

The supplies would pass through an underwater pipeline constructed nearly a
decade ago by East Mediterranean Gas (EMG), the company that oversaw a
now-defunct Egyptian-Israeli natural gas deal.

Egypt had been selling gas to Israel in a 20-year agreement, but the deal
collapsed in 2012 after months of attacks on the pipeline by militants in
Egypt's lawless Sinai peninsula. It has since been out of commission and EMG
is suing the government of Egypt for damages.

Recent offshore discoveries such as Tamar, with an estimated 280 bcm of gas,
and Leviathan, which is more than twice as big, have turned previously
import-dependent Israel into a potential energy exporter. Egypt has been
slow in developing its own sizable gas resources and now faces an energy
crisis.

The Tamar consortium, led by Texas-based Noble Energy and Israel's Delek
Group, said in a statement they signed a letter of intent to negotiate with
Dolphinus Holdings, a firm that represents non-governmental, industrial and
commercial consumers in Egypt.

Any deal would be subject to various approvals in Israel, Egypt and from
EMG.

The gas to be sent through the pipeline would be "interruptible", meaning it
would only come from excess reserves. It would be sold at a price comparable
to other export agreements from Israel and based mainly on a linkage to
Brent oil prices.

Tamar began production last year and output is mostly earmarked for the
Israeli market. In addition, the Tamar partners are already in talks to
provide an annual 4.5 bcm of gas for 15 years to Union Fenosa Gas for its
liquefied natural gas (LNG) plant in Egypt and a total of 1.8 bcm over 15
years to Jordan. Union Fenosa Gas is a joint venture between Spain's Gas
Natural and Italy's Eni.

Noble and Delek are also developing the Leviathan field and are working on a
major deal with BG Group to export 7 bcm of gas a year over 15 years for
their LNG plant in Egypt.

"The memorandum of understanding with Dolphinus is another important link in
the series of agreements that will allow the supply of natural gas to the
domestic market in Egypt," said Gideon Tadmor, chief executive of Delek
subsidiary Avner Oil Exploration

"I have no doubt these agreements will lead to a strengthening of ties
between Israel and its neighbors."