Israel and Egypt strike ‘historic’ $15 billion natural gas deal

By February 20 2018, 14:20 Latest News No Comments

Egypt Israel gasIsraeli energy company, Delek Drilling-LP, and its American partner Noble Energy Inc have signed a $15 billion (£10.7 billion) export deal with Egypt, which the Delek’s CEO Yossi Abu has called Israel’s largest ever export agreement.

The partners intend to supply around 64 billion cubic litres of natural gas to Egyptian company Dolphinus Holdings over a 10 year period.

Israeli Prime Minister Benjamin described the deal as “historic”, claiming that it “will put billions in the state treasury to benefit the education, health & social welfare of Israel’s citizens”. This deal follows one struck in 2016 with Jordanian utility company NEPCO, setting Delek and Noble on track to become regional exporters.

There is also hope that adding the economic dimension to the relationship between Egypt and Israel will strengthen both its security and energy ties. The Egyptian government had previously frozen talks on gas deals after an international arbitration court ruled that Egyptian companies must compensate Israeli electricity providers regarding a past deal that involved export of Egyptian gas to Israel.

The announcement saw the Tel Aviv Stock Exchange Oil and Gas Index jump as much as 16% as of 2:43 local time, the most on record.

Mr Abu was keen to emphasise the significance of the deal for both countries’ economies: “This paves the way for further deals and cements Egypt as a regional energy hub… This will be an engine for both the Egyptian and Israeli economy alike. We’re proud to be part of this moment”.

Israel and Egypt signed a historic peace accord in 1979.

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