The week in energy: A new gas export hub?

The week in energy: A new gas export hub?:

"President Anwar Sadat of Egypt and Menachem Begin, Israel’s prime minister, shared the Nobel Peace Prize in 1978 for their contribution to the Camp David accords, intended to bring peace in the Middle East. Their agreement, formalised in the Israel-Egypt Peace Treaty of 1979, ended the state of war between their countries, but relations have often been strained during the subsequent four decades. In recent years, however, there have been signs that the “cold peace” has become a closer relationship, if not necessarily a warmer one, and this week the two countries’ strategic ties were deepened by a $15bn deal to sell Israeli gas to Egypt. Yuval Steinitz, Israel’s energy minister, hailed it as the most significant deal with Egypt since that 1979 treaty. The agreement opens up a new market for gas from Israel’s offshore gasfields Tamar and Leviathan, discovered in 2009-10, and also points to possible further co-operation in the future. Most of the 64bn cubic metres of gas that Delek Group of Israel has agreed to sell to Dolphinus Holdings of Egypt is intended for the domestic market. But Egypt has also had large gas discoveries of its own and has been bringing them into production, including the giant Zohr gasfield, with the result that it is poised to become a gas exporter again. Egypt has two LNG liquefaction plants, and was a gas exporter in the 2000s, but falling production ad rising demand meant it became a net importer in 2015, and the LNG plants have been idled. The intelligence group Stratfor argued that an attractive option for exporting gas from Israel and Cyprus would be to use those facilities, making Egypt “the centre of regional natural gas development”."



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