Page 6 - MEOG Week 03 2021

MEOG PIPELIENS & TRANSPORT MEOG

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
struct a pipeline that will allow for direct gas and Tamar to Egypt.
exports from the assets to Egypt. The Ashdod to Ashkelon link will cost around
In a statement, Israel’s Delek Drilling said $228mn and the expansion work another $7mn.
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
Delek CEO Yossi Abu said: “The fact that we balance.
are paying most of the costs involved in build- The new line will allow the producers to
ing the new pipeline reflects the security and the maintain a base capacity of 5bn cubic metres per
confidence we have in continuing to increase year of supply to Egypt following the signing of
exports to the countries of the region.” Under the an eight-year supply deal with gas flows to kick
terms of the deal, national transmission operator off in mid-2022 and early 2023. The upper limit
Israel Natural Gas Lines (INGL) will construct will be 7bcm per year.
the new pipe from Ashdod to the terminal of Egypt intends to export this gas as well as that
the East Med Gas (EMG) pipeline in Ashkelon produced from the giant Zohr field, which lies
“for the purpose of export to Egypt” following in its own segment of the East Mediterranean.
an agreement set out in May 2019.
The shareholders in the Leviathan project Delek spin-off
are; Delek (45.34%), Chevron (39.66%) and Meanwhile, Delek is planning to launch a
Ratio Oil Exploration (15%) while the Tamar NewCo on the London stock exchange to which
shareholders are; Isramco Negev 2 (28.75%), it will transfer all of its assets aside from its stake
Chevron (25%), Delek (22%), Tamar Petroleum in Tamar, which it must divest in order to comply
(16.75%), Dor Gas Exploration (4%) and Everest with Israeli anti-monopoly 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 3.5tcf (10bcm) Aphrodite gas field and the
for around $5bn. onshore Israeli New Ofek and New Yahel
Around a year earlier, the EMED consortium licences. It will also receive royalties from the
comprising Delek (25%), Noble (now Chevron, Karish and Tanin fields, which were sold to fel-
25%) and the East Gas Co. (50%), completed a low 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.™

Source: Delek Drilling

P6 www. NEWSBASE .com Week 03 20•January•2021