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| Sherif Ismail |
In a statement to the press, Ismail said that his government was committed to preventing Israeli natural gas from penetrating the Egyptian market. He called on all Egyptian companies to cease all negotiations on the matter.
National Infrastructure, Energy and Water Minister Yuval Steinitz on Wednesday approved the first deal to export gas from Israel to Egypt.
The seven-year agreement signed between the Tamar reservoir partners and Egypt’s Dolphinus Holdings Ltd. in March aims to convey 5 billion cubic meters of gas through the now defunct East Mediterranean Gas pipeline, which used to bring gas in the opposite direction from Egypt to Israel. EMG, however, has repeatedly denied its involvement in or recognition of such a deal.
In addition to the fact that EMG continues to reject the agreement between the Tamar partners and Dolphinus, the gas export arrangement also may face some hurdles within the Egyptian government.
In 2008, two Egyptian national gas companies began selling gas to the Israel Electric Corporation through the EMG pipeline – supplying the country with about 40 percent of its natural gas provisions.
SOURCE
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same story in Natural Gas Europe
December 24th
GOVERNMENT APPROVES FIRST GAS EXPORT CONTRACT FROM ISRAEL TO EGYPT
Israeli Energy Minister, Yuval Steinitz, signed yesterday (Wednesday) approval for the Tamar Partnership to export natural gas to Egypt via Dolphinus Holdings. The approval is for a 7-year interruptible contract, worth $1.2 billion for the export of 5 BCM.
The gas will be transmitted to Egypt through the undersea EMG pipeline that was used to import gas to Israel from Egypt before repeated terror attacks and change of regime in Egypt caused cancelation of the contract in 2012. Last month Israel Electric Corp (IEC) won in an arbitration a compensation of $1.8 billion from the Egyptian gas suppliers for the contract cancelation. Following the arbitration result, Egypt President, Abdel Fattah el-Sisi, ordered to freeze natural gas negotiations with Israel. However, the instruction was likely concerning Egyptian national gas companies rather than private ones, although private deals, like this one, would need governmental approval.
Dolphinus Holdings is a mysterious entity and the company intends to sell the gas to private customers from various sectors of the Egyptian economy.
It is still not clear why the contract approval by Israel Energy Ministry was delayed for 9 months and why it was given today. The approval was never conditional on the approval of the natural gas regulatory framework, which was signed last week. The framework has yet to overcome its last hurdle, petitions to the Supreme Court to be heard next February.
In the past, Tamar Partnership said that only a period of a few weeks and an investment of some $10 million in the EMG pipeline is needed from contract approval to start of gas delivery. However following the freeze on natural gas negotiations between Israel and Egypt further talks on a political level are needed. Yitzhak Molcho, a personal envoy of Israel PM, is expected soon to head the negotiations. It is still not clear what demands EMG, the undersea pipeline owner, would present to the Tamar Partnership and Dolphinus Holdings in order to let them use the pipeline. In the past, there was unofficial information that the Tamar Partnership hasn’t asked to use the pipeline but those rumors were denied. A person with knowledge about the Dolphinus contract, who was not allowed to speak publicly, said that probably during 2016 gas transmission to Egypt would start.
The EMG pipeline is a 100 km undersea branch of the Arab Gas Pipeline that connects Egypt with Jordan, Syria and Lebanon. EMG is an Egyptian company with an international group of share holders, among them Thai state-owned PTT (25%), Mediterranean Gas Pipeline Company (28%), the Israeli Merhav Group holds 25% of the shares via 2 entities, Egyptian Natural Gas Holding (10%) and others.
As part of the IEC arbitration with Egyptian companies, it was ruled that EMG, who was the mediator in the gas deals between Egypt and Israel, is entitled to $324 million in compensation. EMG shareholders also sued Egypt for $8 billion and the arbitration is still ongoing. It is assumed that Egypt would demand dropping the arbitration claim as a condition for the approval of the gas contract. However, it is unclear whether the shareholders will be willing give up without nothing in return, apart from reactivating the pipeline.
Ya'acov Zalel
SOURCE
