Delek in $15 Billion Deal To Supply Gas to Egypt’s Dolphinus

Delek Drilling, along with Texas-based Noble Energy, has signed a deal worth potentially $15 billion to sell natural gas from its Leviathan and Tamar fields to Egypt’s Dolphinus Holdings Ltd.

Delek and Nobel will supply some 3.5 billion cubic feet of gas from each of the fields for a  total of 64 billion BCM from the two fields by 2030, the company said. The agreement to supply gas from the Tamar field replaces a previous, smaller agreement, signed in 2015, Delek noted in a statement to the Israel Securities Authority and the Tel Aviv Stock Exchange Monday.

Delek said that the price of the gas would be set according to a price formula linked to a barrel of Brent crude oil.

The company noted that the supply of gas from Tamar would commence once infrastructure for the delivery of natural gas was operational, and from Leviathan when production at the field began.

Delek said it was examining a number of options to deliver the gas to Egypt, including the  Arish-Ashkelon section of the existing Eastern Mediterranean Gas (EMG) pipeline and the Pan Arabian pipeline via Jordan.

The EMG pipeline is a branch of the Arab Gas Pipeline and runs underwater west of the coastline of Egypt, Gaza and Israel. It was formerly used to deliver gas from Egypt to Israel, but supplies were ceased in 2013 due to repeated attacks on a feeder pipeline in the Sinai Peninsula and gas shortages in Egypt. Earlier this week, the EMG partnership was awarded $1 billion in compensation by a Cairo based court of arbitration.

Delek Drilling was up by almost 28% on the Tel Aviv Stock Exchange on the news. Delek’s junior partner in the Leviathan field, Ratio Oil Exploration, was up by 25%.