Egypt begins importing Israeli gas

Gas from Israel’s offshore fields will reach Egypt through mainly undersea pipeline, before being re-exported to Europe.

CAIRO - Israel began pumping natural gas to Egypt for the first time on Wednesday under a $15 billion, 15-year deal to liquefy it and re-export it to Europe.

It is the first time that Egypt, which in 1979 became the first Arab country to sign a peace treaty with Israel, has imported gas from its neighbour.

In a joint statement, Egypt's petroleum ministry and the Israeli energy ministry hailed an "important development that serves the economic interests of both countries".

It enables "Israel to transfer quantities of its natural gas to Europe through Egyptian liquefied natural gas (LNG) plants," the statement added.

Israeli Energy Minister Yuval Steinitz, who is to attend a formal launch ceremony in Cairo on Thursday, described the deal as the first of its kind between the two countries since the Camp David accords which led to their 1979 peace treaty.

Israel had previously bought gas from Egypt, but land sections of the export pipeline were targeted multiple times by Sinai jihadists in 2011 and 2012.

The gas from Israel's offshore Tamar and Leviathan fields will reach Egypt through the mainly undersea East Mediterranean Gas Company pipeline connecting the Israeli coastal city of Ashkelon with the northern Sinai peninsula.

Tamar, which began production in 2013, has estimated reserves of up to 238 billion cubic metres (8.4 trillion cubic feet).

Leviathan, which began pumping late last month, is estimated to hold 535 billion cubic metres (18.9 trillion cubic feet) of natural gas, along with 34.1 million barrels of condensate.

The companies operating the two fields -- Delek Drilling and Noble Energy -- reached a deal in 2018 with Egypt's Dolphinus Holdings to start exporting gas through its well-developed LNG plants.

Delek Drilling's CEO Yossi Abu hailed Wednesday's launch as a "new era in the Middle East energy sector".

Israel's eastern neighbour Jordan -- the only other Arab country with which it has signed a peace treaty -- has been purchasing gas from the Tamar field on a small scale for some three years.

Resistance at home

Before this long-anticipated deal, Israel’s only gas customer was Jordan, with the list of potential buyers dwindling, largely due to having made gas discoveries themselves.

Despite this, many Israelis have environmental concerns over the aptly-named Leviathan platform, 10km off the coast of Tel Aviv, with protesters trying unsuccessfully to force the structure to be built further out at sea.

Hundreds of Jordanian demonstrators took to the streets for the second week in a row last week calling for the end of their $10 billion has deal with the Jewish State.

They say that the deal was completed behind closed doors and without public consent, and that they reject using energy ‘stolen from occupied Palestine’.

The agreement is set to supply Jordan with gas for the next 15 years, with the government claiming that it will help secure stable energy prices over the next decade, while also helping to reduce Jordan’s budget deficit, potentially saving at least $500 million per year.

Israel is not the only country to have discovered offshore reserves in the eastern Mediterranean, with Cyprus too having made significant finds and has similar plans to pump its gas to Egypt for liquefaction and re-export to Europe.

The North African state hopes to become a regional gas hub.

But Israel and Cyprus signed an agreement with Greece earlier this month to build a 2,000-kilometre (1,200-mile) pipeline dubbed EastMed to transfer between nine and 12 billion cubic metres of gas a year from the eastern Mediterranean to Greece, and then on to Italy or the Balkans.