Page 14 - DMEA Week 03 2021

DMEA TRANSPORT DMEA

East Med players to build gas

pipeline for Egypt flows

ISRAEL FIRMS developing Israel’s Leviathan and Tamar Noble said it intends to use the line to fulfil
gas fields have announced that they will con- existing gas contracts with flows from Leviathan
Delek is also planning struct a pipeline that will allow for direct gas and Tamar to Egypt.
to launch a NewCo exports from the assets to Egypt. The Ashdod to Ashkelon link will cost around
on the London Stock In a statement, Israel’s Delek Drilling said $228mn and the expansion work another $7mn.
Exchange. that the partners would spend around $235mn The upstream partners will cover around 56%
to lay the new conduit while expanding existing of the new pipeline and will provide guarantees
infrastructure. for the funding taken out by INGL to cover the
In a company statement, Delek CEO Yossi balance.
Abu said: “The fact that we are paying most of The new line will allow the producers to
the costs involved in building the new pipeline maintain a base capacity of 5bn cubic metres per
reflects the security and the confidence we have year of supply to Egypt following the signing of
in continuing to increase exports to the coun- an eight-year supply deal, with gas flows to kick
tries of the region.” Under the terms of the deal, off in mid-2022 and early 2023. The upper limit
national transmission operator Israel Natural will be 7bn cubci metres per year.
Gas Lines (INGL) will construct the new pipe Egypt intends to export this gas as well as that
from Ashdod to the terminal of the East Med produced from the giant Zohr field, which lies
Gas (EMG) pipeline in Ashkelon “for the pur- in its own segment of the East Mediterranean.
pose of export to Egypt” following an agreement
set out in May 2019. Delek spin-off
The shareholders in the Leviathan project Meanwhile, Delek is planning to launch a
are: Delek (45.34%), Chevron (39.66%) and NewCo on the London Stock Exchange (LSE)
Ratio Oil Exploration (15%), while the Tamar to which it will transfer all of its assets aside
shareholders are: Isramco Negev 2 (28.75%), from its stake in Tamar, which it must divest
Chevron (25%), Delek (22%), Tamar Petroleum in order to comply with Israeli anti-monopoly
(16.75%), Dor Gas Exploration (4%) and Everest legislation.
Infrastructures (3.5%). The NewCo will include the Leviathan and
Chevron acquired its stakes following the EMG pipeline stakes as well as 30% in Cyprus’
2020 acquisition of fellow US firm Noble Energy 3.5 trillion cubic foot (10 bcm) Aphrodite gas
for around $5bn. field and the onshore Israeli New Ofek and New
Around a year earlier, the EMED consortium Yahel licences. It will also receive royalties from
comprising Delek (25%), Noble (now Chevron, the Karish and Tanin fields, which were sold to
25%) and the East Gas Co. (50%) completed a fellow London-listed Energean in 2016.
deal to acquire a 39% stake in EMG, the owner Speaking in December, Abu said that moving
of the EMG pipeline, for $185mn. these assets to a NewCo would mean that poten-
The 90-km conduit connects the gas net- tial buyers of the Tamar stake would have the
works of Israel and Egypt, and had been used option to buy the 22% outright or to acquire the
in a controversial and opaque three-way deal ‘Delek Tamar’ company, with the latter provid-
that saw Egyptian gas supplied to Israel, but the ing a “more liquid opportunity and a transaction
facility suffered repeated attacks in the wake of that can be done easily”.
the 2011 revolution and the deal was unilater- The company has set up a data room and has
ally terminated by Cairo the following year as a several parties involved in the farm-out process,
domestic shortage loomed. with a deal anticipated during Q1. ™

P14 www. NEWSBASE .com Week 03 21•January•2021