Partners in Israel's Tamar Field Sign MOU to Supply Gas to Private Egyptian Companies

 By Sara Toth Stub 

JERUSALEM--The partners in Israel's offshore Tamar natural gas field said Sunday that they have signed a non-binding agreement to supply energy to private companies in Egypt. This follows a handful of other similar, non-binding export agreements, including supplying Israeli gas to Jordan.

The memorandum of understanding calls for the Tamar partners to supply five billion cubic meters of natural gas on an interruptible basis over seven years to the Egyptian company Dolphinus Holdings Ltd., which is a consortium of large non-governmental Egyptian gas consumers and distributors led by Egyptian businessman Alaa Arafa, according to Delek Drilling (DEDR.L.TV).

Those partners include a unit of Texas-based Noble Energy (NBL), which holds 36%, in addition to Israeli companies Isramco Neveg 2 Ltd. Partnership, Avner Oil Exploration Ltd. Partnership, and Delek Drilling Ltd. Partnership.

The gas will be exported to Egypt via an existing pipeline formerly used by East Mediterranean Gas, the Tamar partners said. EMG stopped supplying Egyptian gas to Israel via that pipeline after several sabotage incidents in the Sinai Peninsula in the wake of the fall of former Egyptian president Hosni Mubarak.

Although Israel's natural gas reserves have yet to actually be exported, the Tamar partners have signed other non-binding agreements, including to sell gas to private Jordanian companies. The increased gas production and prospect of exports have boosted the shekel significantly since last year, and led to aggressive market intervention by the central bank.

In September, Israeli partners in the nearby Leviathan field signed a non-binding deal to supply 45 billion cubic meters of gas over 15 years to Jordan's state-owned power company. The Leviathan partners have also signed a non-binding agreement with BG Group PLC to supply its facility in Egypt.

The Tamar field contains about 9 trillion cubic feet of gas, most of which has been earmarked for the local market, and production began there last year. The Leviathan field is estimated to contain about 20 trillion cubic feet of gas, but production has not yet started.

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