Israel's Leviathan Signs Preliminary Egypt Natgas Deal

Reuters

JERUSALEM, Nov 25 (Reuters) – Natural gas from Israel's vast Leviathan offshore gas field will be pumped to Egypt via an existing subsea pipeline for up to 15 years under a preliminary deal announced by the field's developers on Wednesday.

Leviathan, which is expected to begin production in 2019 or 2020, will supply Egypt's Dolphinus Holdings with up to 4 billion cubic metres (bcm) of gas per year for 10 to 15 years, the companies said in a statement to the Tel Aviv Stock Exchange.

Signing a letter of intent, the two sides agreed to negotiate terms for a final deal.

The price of gas is similar to other contracts and is linked to the cost of Brent oil and includes a floor price, they said.

"We've worked with Dolphinus before and we expect to reach a final agreement quickly," Yossi Abu, chief executive of Israel's Delek Drilling, told Reuters.

Development of Leviathan, which holds an estimated 622 bcm of gas, is being led by Texas-based Noble Energy and Delek Group through its units Delek Drilling and Avner Oil and Gas.

Shares in the Dalek companies were up by 2 to 4 percent in early trade on Wednesday.


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