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    Israel to Connect Leviathan with Egyptian LNG Plants: Update


Egypt has ample gas of its own, but wants to supplement its exports with third party volumes from Israel.

by: Joe Murphy & William Powell

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Middle East, Liquefied Natural Gas (LNG), Premium, Political, Intergovernmental agreements, News By Country, Egypt, Israel, Israel

Israel to Connect Leviathan with Egyptian LNG Plants: Update

(Changes source, adds details)

The Israeli and Egyptian governments have agreed to build a pipeline linking Israel's offshore Leviathan gas field to LNG terminals in north Egypt, partner Delek Drilling said February 21. There is already one pipeline, the Dolphinus, carrying Israeli gas to Egypt, despite the huge reserves offshore Egypt and despite the two countries' difficult history.

Israeli energy minister Yuval Steinitz hosted a meeting with Egyptian petroleum minister Tarek El Molla including a visit to the Leviathan platform, to discuss gas market co-operation. Steinitz said the two sides were moving forward with a pipeline plan and were drawing up a formal agreement. 

It was the first visit to Israel of an Egyptian minister in five years, and the first in decades of a member of the Egyptian parliament who is neither a foreign minister nor an intelligence minister, Delek said. His visit ends February 23.

The Chevron-led Leviathan group are looking into a number of additional projects for exporting natural gas to Egypt, including via LNG or through CNG, or by allowing the flow of gas from Israel to Jordan via the northern pipeline and from there to Egypt; or to establish/connect a new pipeline from Israel to Egypt (in the Nitzana or Kerem Shalom area), Delek said. The group agreed in January to invest shekels 738mn ($227mn) in infrastructure expansion, to enable the delivery of up to 7bn m3/year of gas to the north African nation.

Delek CEO Yossi Abu said that the visit was "proof of the saying that dreams do come true. His vision, together with that of [Egyptian] president Al-Sisi, is being realised here every day.... Together we are cleaning the Middle East of coal and oil and creating a historic partnership that would once have been impossible."

Following on from the Dolphinus Agreements signed in 2018, as of January 2020 the Leviathan reservoir has been exporting significant quantities of natural gas to local customers in the Egyptian economy, Delek said. In accordance with the agreements, these export quantities are set to increase in the coming years. In addition, as of last July, natural gas is also exported to Egypt from the Tamar reservoir.

Egypt, which has ample gas supply of its own, can then export these supplies as LNG from its terminals in Idku and Damietta. The Shell-operated Idku facility can export up to 7.2mn metric tons/year of LNG, while the Eni-run Damietta plant can ship up to 5mn mt/yr but has been idle since 2012. Eni says the terminal is on track to ship its first cargo this month, however, following an agreement in December between the project's shareholders that resulted in the withdrawal of Spain's Naturgy.