Delek, Noble Buy $500 Million Stake in Egyptian Gas Pipeline

Delek Drilling and Noble Energy, the companies developing Israel’s Leviathan gas field, have, along with an Egyptian firm, signed a deal to buy a 39 percent stake in Eastern Mediterranean Gas Co. (EMG). The $518 million deal will see Delek and Noble paying $185 million each, with the rest paid by their Egyptian partner, Egyptian East Gas Co.

The deal gives the purchasers exclusive rights to operate EMG’s undersea pipeline, which will be used to bring gas to Egypt from Israel’s Leviathan and Tamar gas fields. It will be used to implement an agreement signed in February that will see Israel export 64 million cubic meters of gas to Egypt over 10 years. Delek said in a statement to the Tel Aviv Stock Exchange that it expects the gas to begin to flow early next year.

In the statement, quoted by Globes, Delek Drilling CEO Yossi Abu said that “the Leviathan field is becoming the central energy anchor in the Mediterranean basin with customers in Israel, Egypt and Jordan.” According to Noble Energy SVP Offshore J. Keith Elliot, the deal “marks 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.”