Israel’s Delek Drilling LP, Noble Energy Inc. The developers of Israel’s largest gas fields Tamar and Leviathan and their Egyptian partner East Gas buy 39 percent stake in Eastern Mediterranean Gas Co.(EMG), according to a statement released Thursday.
The three companies will pay $518 million for the controlling stake in the gas pipeline to Egypt. Delek and Noble paying $185 million each and the balance pay by East Gas.
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According to the agreement the buyers will receive exclusive rights to lease and operate EMG’s subsea gas pipeline, which connects Ashkelon, in southern Israel to Egypt via Sinai peninsula.
The partners Delek and Nobel Energy will use the EMG gas pipeline to implement a $15 billion deal signed in February to export 64 million cubic meters of natural gas to Egyptian company Dolphinus over 10 years.
Delek said Leviathan gas is due to begin flowing in early 2019. Noble Energy expects that Dolphinus will be supplied with gas from the Tamar field even before then.
Delek Drilling CEO Yossi Abu said, “The Leviathan field is becoming the central energy anchor in the Mediterranean basin with customers in Israel, Egypt and Jordan.”
Noble Energy SVP Offshore J. Keith Elliott said, “Today’s announcements mark significant steps forward in supplying natural gas from the world-class Tamar and Leviathan fields to regional customers through existing infrastructure. They also represent another major milestone toward Egypt’s goal to become a regional energy hub, providing access to both growing domestic markets and existing LNG export facilities. With these agreements, we are securing the capacity to deliver on our firm gas sales agreement with Dolphinus for Leviathan while also allowing for interruptible sales from Tamar into Egypt. This further solidifies the strong cash flow growth anticipated from our Eastern Mediterranean assets.”