Israel-Egypt gas deal gets a boost as shares soar

“The agreement is a further proof of the important economic cooperation between the two countries and the tremendous positive impact that these relations have on both economies."

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October 3, 2019 17:33
1 minute read.
Israel-Egypt gas deal gets a boost as shares soar

THE LEVIATHAN jacket.. (photo credit: ALBATROSS)

Gas giant Delek Group Ltd.’s announcement that it had updated an agreement for the export of liquefied natural gas from the Leviathan and Tamar offshore reservoirs to Egypt sent share prices soaring on Wednesday.

In February 2018, Delek Drilling and Texas-based Noble Energy – partners in the Leviathan and Tamar LNG projects – signed a $15b. decade-long deal to supply 64 billion cu.m. of natural gas to Egypt’s Dolphinus Holdings Ltd.

The new agreement provides for a 35% increase in the total gas supply that will now reach 85 billion cu. m.

“The agreement is a further proof of the important economic cooperation between the two countries and the tremendous positive impact that these relations have on the Egyptian economy and the Israeli economy, as well as the great potential for additional cooperation in the mutual interest of the parties,” Yossi Abu, CEO of Delek Drilling, said in a statement on Wednesday.

The deal with Egypt followed a September 2016 agreement worth $10b. between Jordan’s National Electric Power Company Ltd. and the Leviathan project partners to supply a gross quantity of 45 billion cu.m. of natural gas to Israel’s eastern neighbor over 15 years.

The Tamar production platform, anchored 25 km. off Israel’s Mediterranean coast, has been supplying natural gas to Israel since 2013. The Leviathan platform is located 10 km. from Israel’s shores. Since its discovery in 2010, Noble Energy and partners Delek Drilling and Ratio Oil Exploration have invested a total of $3.75b. in the project.

Following the announcement, shares in Delek gained 7.1% and those in partner Ratio Oil Exploration LP climbed 8.2% by 1:58 p.m on Wednesday in Tel Aviv, Bloomberg reported.

Gas exports are set to commence on January 1, 2020.

 


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