Noble has Solution for Israeli Gas Exports to Egypt

Monday, October 1, 2018

Noble Energy executed multiple agreements to support delivery of natural gas from the Leviathan and Tamar fields, offshore Israel, into Egypt.

1. Keith Elliott, Noble Energy’s Senior Vice President, Offshore, stated: “Today’s announcements mark significant steps forward in supplying natural gas from the world-class Tamar and Leviathan fields to regional customers through existing infrastructure.  They also represent another major milestone toward Egypt’s goal to become a regional energy hub, providing access to both growing domestic markets and existing LNG export facilities.  With these agreements, we are securing the capacity to deliver on our firm gas sales agreement with Dolphinus for Leviathan while also allowing for interruptible sales from Tamar into Egypt.  This further solidifies the strong cash flow growth anticipated from our Eastern Mediterranean assets.”

The company and certain partners are acquiring an effective 39% equity interest in Eastern Mediterranean Gas Company, which owns the EMG Pipeline. The EMG Pipeline is an approximately 90-km pipeline located primarily offshore, connecting the Israel pipeline network from Ashkelon to the Egyptian pipeline network near El Arish.

Noble will own an effective, indirect interest in the pipeline of around 10%. In addition, and upon closing of the transaction, Noble Energy and partners will enter into an agreement to operate the pipeline, securing access to the pipeline’s full capacity. Technical evaluation and flow reversal planning work on the EMG Pipeline is ongoing.

Key conditions required prior to closing the agreements include gaining necessary regulatory and government approvals, obtaining technical third-party recertification of the EMG Pipeline, completing final transaction due diligence, and confirming sustained gas flow. The company’s estimated acquisition costs are approximately $200 million, payable at closing. The closing of all transactions is expected in early 2019.

Initial gas delivery through the EMG Pipeline is expected to occur from the Tamar field to Dolphinus Holdings in Egypt, under Noble’s existing interruptible natural gas sales agreement.  At startup of the Leviathan field by the end of 2019, it anticipates selling at least 350 Mmcf/d, gross, to contracted customers in Egypt.

Noble also secured an option for an additional route and capacity to transport natural gas within Egypt by entering into a definitive transportation agreement with the owner and operator of the Aqaba El Arish Pipeline. This agreement will support the transportation of additional quantities of natural gas to Egypt over and above the amounts through the EMG Pipeline.

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