Israel Begins Shipping Gas to Egypt via a Subsea Pipeline

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Israel Begins Shipping Gas to Egypt via a Subsea Pipeline

Mon, 05/11/2020 - 12:04
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Israel and Egypt flag (copyright by Shutterstock/ruskpp)
Israel and Egypt flag (copyright by Shutterstock/ruskpp)

Against the backdrop of the Corona pandemic what has been touted as " the most significant deal to emerge since the countries signed a historic peace treaty in 1979," Israel and Egypt began implementing an estimated $19.5 billion natural gas deal.  The move comes shortly after natural gas started flowing from the massive Leviathan gas field, located in the eastern Mediterranean off the coast of Israel.

The Leviathan field is estimated to hold 22 trillion cubic feet of recoverable natural gas, and a potential half a million barrels of oil, according to estimates provided by the partners in the field.

Israel will initially export 200 million cubic feet of gas per day to Egypt, two Egyptian industry sources said. Gas from Leviathon will be supplied to Dolphinus at a rate of 2.1 Bcm per year, rising to 4.7 Bcm per year by the second half of 2022, according to Delek Drilling, an Israeli firm.

The gas is being supplied via a subsea pipeline connecting Israel and Egypt's Sinai peninsula, which Israeli Energy Minister Yuval Steinitz said had sufficient capacity for current volumes, though the option of building a second pipeline was being considered if demand from Egypt grew. Exports of Tamar Basin  gas, next to Leviathan, to Dolphinus, an Egyptian company, are expected to start later this year.

Ultimately both Israel and Egypt hope to see Leviathan gas processed at one or both of Egypt's LNG plants before being shipped to lucrative markets in Europe. Egypt is currently exporting one billion cubic feet of gas to Europe every month via 10 shipments,Tarek El-Molla, the country's petroleum minister said.  The joint goal would be to double this amount.

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