Israel and Egypt Sign $15 Billion Gas Deal

The Israeli company "Delek Energy" along with its American partner "Noble" signed a contract on Monday, February 19, to export 64 billion cubic meters of gas from the "Leviathan" and "Tamar" offshore fields to the private Egyptian company "Dolphinus." According to Reuters, this amount of gas, valued at $15 billion, will be delivered to Egypt over a period of 10 years. Statistics from Delek's official website indicate that the two mentioned fields have a combined total of over 923 billion cubic meters of gas reserves. Bloomberg also reported that Israel had signed a similar contract with Jordan two years ago, which was a 15-year agreement worth $10 billion, with gas sourced from the "Leviathan" field. Israeli Prime Minister Benjamin Netanyahu stated that the contract signed with Egypt will strengthen the economy and regional relations of the two countries. He said, "It is a pleasant day. Billions of dollars will enter the country's treasury, which will be spent on the welfare, health, and education of Israeli citizens." Yuval Steinitz, Israel's Energy Minister, also mentioned that this contract is the most significant agreement between the two countries since the peace treaty was signed in 1979. Reuters noted that the stock value of Delek increased by 17% following the announcement of the contract. It is still unclear when gas deliveries from these offshore fields will begin, but according to the plan, the Leviathan field is expected to be operational next year, and Reuters states that gas deliveries from the Tamar field will likely start in 2020. The massive gas contract with Egypt comes at a time when the Italian company "Eni" has recently launched the giant "Zohr" gas field in Egypt, which currently produces 3.5 billion cubic meters of gas annually and is expected to produce nearly 28 billion cubic meters annually starting next year. Meanwhile, an unnamed Egyptian official told Reuters that the gas purchase agreement with Israel does not mean Egypt is importing gas. According to this official, private companies can buy Israeli gas and then re-export it after converting it to liquefied natural gas (LNG).