• 19:07
  • Tuesday ,21 October 2014

Egypt-Israel gas deal won’t happen without state’s approval: Petroleum ministry

By Daily News Egypt

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Tuesday ,21 October 2014

Egypt-Israel gas deal won’t happen without state’s approval: Petroleum ministry

Addressing the issue of importing gas from Israel, Ministry of Petroleum’s spokesperson Hamdy Abdel Aziz explained in a Sunday statement that no agreement has been signed yet.

Abdel Aziz stressed that any agreement will not be reached without the approval of the Egyptian authorities, noting that the ministry did not receive any letters for approval yet. “The ministry considers projects that achieve the national interests of Egypt and a high added-value to the economy,” Abdel Aziz added.

A non-binding Letter of Intent was signed on 17 October between the Tamar Partners and Dolphinus Holdings Limited, which confirms the intention of the involved parties to carry out negotiations on the natural gas supply from the field to Egypt, Israeli energy company Delek said in a Sunday statement.

The company added that the gas supply will be of 250,000 MMBtu (One million British Thermal Unit) over a period of seven years, on an interruptible basis of quantities of surplus gas from the Tamar field.

The transferred gas, to be purchased by the buyers, will be supplied to industrial consumers in Egypt, according to Delek.

Gas quantities will delivered to Egypt through the Egyptian-Israeli East Mediterranean Gas (EMG) pipelines, constructed a decade ago to transfer Egyptian gas to Israel. Mubarak-era business tycoon Hussein Salem, currently in Spain, owns shares in EMG and is a defendant in a number of cases regarding profiteering and seizing public funds.

Israeli gas buyer, Dolphinus Holdings Limited, represents a consortium of major of Egyptian non-governmental gas consumers and distributors headed by businessman Alaa Arafa, Delek said.

In the same regard, Minister of Petroleum Sherif Ismail told the Daily News Egypt in July that the ministry does not mind allowing British BG Group to import gas from Israel, noting that the British company has only signed a letter of intent as an initial agreement to start negotiating with partners in the Leviathan gas field to import natural gas from Israel to a BG Group liquefaction plant in Idku, Egypt.

In 2005, a 20-year deal was signed allowing the delivery of Egyptian gas to Israel and was said to have provided 40% of Israel’s natural gas. However, the deal was terminated by Egyptian authorities in 2012.