Energy Minister Permits Gas Exports to Shady Egyptian Company

Yuval Steinmetz says deal moves Israel in directionof becoming a natural gas powerhouse

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Off Haifa coast, oil rig at enormous Leviathan natural gas field.
An oil rig in the Leviathan natural gas field off the Haifa coast.Credit: Albatross

Energy Minister Yuval Steinitz has granted the owners of the Tamar offshore natural gas field permission to export gas to a shadowy company registered in the Virgin Islands.

The permit was granted even though the High Court of Justice is due to hear a petition against Prime Minister Benjamin Netanyahu’s plan to develop Israel’s natural gas fields.

The High Court gave the state until December 27 to respond to several petitions and is due to hold a hearing on the matter on February 3.

The company in question, Dolphinus, has operations in Egypt and is owned by a businessman named Alaa Arafa, who says that he represents customers in the El Arish region. Two weeks ago, Arafa was quoted as saying that the Egyptian regime ordered him to halt negotiations with Israel until a solution could be found to Egypt’s dissatisfaction over an arbitration ruling regarding Egypt’s contract to buy gas from Israel.

The Energy Ministry did not respond to TheMarker’s question regarding whether it could detail Delphinus’s ownership structure.

Furthermore, the agreement between U.S.-based Noble Energy, one of the companies that controls the Tamar reserve, with Delphinus raises questions regarding the method of export. Delphinus signed an agreement in principle to import an even larger quantity of gas from the Leviathan offshore gas reserve, which is also controlled by Noble and its Israeli partner Delek Group.

Arafa signed an agreement in principle to import 5 billion cubic meters of gas from Tamar over the course of seven years, and to import 4 billion cubic meters of gas a year from the Leviathan reserve for 10 to 15 years.

The gas is supposed to be exported via the Sinai pipeline operated by the EMG Group. However, EMG said no such talks had taken place, and expressed protest at its name being mentioned in connection to talks with Delphinus.

The Energy Ministry stated in its announcement that Yossi Wirtzberger, the official in charge of natural gas and oil, had spoken with Netanyahu and Steinitz with the goal of having the deal between Tamar and Delphinus approved.

“This is expected to significantly reinforce the economic ties between the nations,” the announcement stated.

Steinitz added, “After years of conflicts and delays, we’re starting to move forward and position Israel as a regional natural gas powerhouse. Exporting to Egypt, in keeping with the government’s decision, would be the first step in energy cooperation with other countries in the region over the next few years, including with Jordan, Greece, Turkey and countries in Europe.”

Meanwhile, the CEO of a Turkish energy firm predicted that Turkey could be importing Israeli gas by 2020.

Turcas CEO Batu Aksoy told Today’s Zaman newspaper on Tuesday that some 8 billion cubic meters of Israeli gas could be transported to world markets via Turkey within five years. Turkey currently imports most of its natural gas from Russia, Iran and Azerbaijan.

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