Petroleum Africa
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Thursday, May 8, 2014
Partners in Israel’s Tamar natural gas field are looking toward neighboring Egypt for export capacity. The partners signed a LoI with Union Fenosa Gas, who operates Egypt’s LNG plant at Damietta, to export up to 2.5 Tcf of gas over a 15-year period. The Tamar field in the eastern Mediterranean holds an estimated 10 Tcf of gas. Israel has an even larger field that it will eventually be exporting from, the Leviathan field, which should turn it into a net energy exporter.
The LoI is a boon for Union Fenosa Gas as its LNG plant at Damietta shut operations last year due to a lack of gas supply since the Egyptian government began keeping its natural gas to meet surging domestic demand rather than sending it to the plant for export. US independent Noble Energy, who is partnered with Isramco Negev, Delek Drilling, Avner Oil, and Dor Gas Exploration said a binding agreement with both sides should be in place within six months. Any deal will still have to pass regulatory scrutiny by Israeli and Egyptian authorities.
Egypt’s oil ministry said it had asked for a meeting with the head of Union Fenosa for details. “There will be no agreements between any parties without the approval of the competent Egyptian authorities,” the statement said. With the election coming up near the end of May, it is unknown when “competent Egyptian authorities” will be able to make that approval.
With power generation problems the deal would be a win-win for both sides, although it is unclear as to whether Egypt will let anti-Israeli feelings by a significant amount of its population to color its decision making for the deal.
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