A LEVIATHAN OF A DEAL, NOT-SO-NOBLE, AS WE SEE IT WITH POTENTIAL FOR FINANCIAL, POLITICAL AND ENVIRONMENTAL ABUSE…
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While we see a “bridge for peace” with this pipeline we also see a huge opportunity for Israel’s citizens to be financially harmed by deals that involve large conglomerates of businesses and investors (Noble-Delek). We see the potential for a natural gas monopoly, the direct road to corruption (not uncommon in Israel’s already precariously balanced political regime) and the potential for all citizens to whom natural gas is supplied by this deal (whether Israeli, Egyptian or otherwise) to be held hostage to the financial whims of the interested investors.
And, we are particularly focused on trying to figure out exactly who are the interested investors. Despite claims of transparency, the dots are not easy to follow, and they should be.
Israel’s Delek, Partners Buy Stake in Egyptian Gas Pipeline for $518 Million
Thursday, 4 October 2018 | Delek, the Israeli energy giant, and its partners have announced that they will buy the EMG Egypt-Israel gas pipeline for [US] $518 million, Globes reported.
Delek and the American company Noble Energy will each pay $158 million for the pipeline. The balance will be paid by the Egyptian company East. The deal will allow Delek and Noble to lease and operate the pipeline, which extends from Ashkelon in Israel to El Arish in the Sinai.
The pipeline will allow Delek and Noble to provide the 64 billion cubic meters [17 trillion gallons] of natural gas to Egypt, which the companies sold to Egypt’s Dolphinus Holding Ltd. for $15 billion in a deal concluded in February of this year.
Delek and Noble are slated to provide Egypt with natural gas from the Leviathan natural gas field starting next year. In the meantime, they will sell gas from the Tamar field.
“The Leviathan field is becoming the central energy anchor in the Mediterranean basin with customers in Israel, Egypt and Jordan,” Delek drilling CEO Yossi Abu said.
“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 [liquid natural gas] export facilities,” Keith Elliott, a senior vice-president with Noble Energy said. “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 discovery of natural gas fields in the Mediterranean has positioned Israel as an energy exporter and boosted its diplomatic standing in the region.
The discovery of the Tamar and Leviathan fields has also led to closer diplomatic cooperation between Israel and both Greece and Cyprus. Israeli prime minister Benjamin Netanyahu has met four times with Cypriot president Nicos Anastasiades and Greek prime minister Alexis Tsipras in the past three years. Cooperation in exporting natural gas has been one of the major topics of their discussions.
Late last year, the three countries reached an agreement to supply natural gas to the European Union.
Posted on October 4, 2018
Source: (This article was originally published by The Israel Project, in its publication The Tower on September 28, 2018. Time related language has been modified to reflect our republication today. See the original article at this link.)