Egypt and Cyprus have agreed to start talks next month towards an agreement to build a pipeline to deliver natural gas to Egypt from Cyprus’ Aphrodite gas field, Xinhua news agency reported, citing Cypriot news sources.
The agreement, which came during a visit by Egyptian President Abdel-Fattah al-Sissi on Monday, calls for making use of an existing pipeline system from depleted Egyptian gas fields to liquefaction plants at Idku and Damietta.
The news comes amid warnings from Egyptian officials in recent weeks that the prospects for Israeli or other gas exports to Egypt are getting slimmer. Some have proposed that Israel, Egypt and Cyprus combine their offshore Mediterranean gas reserves to create a giant gas hub and sell to Europe, but progress has been halting.
Three years ago, Delek and Noble, the lead partners in Israel’s Leviathan, signed a memorandum of understanding with Shell to supply gas for 15 years to the company’s Egyptian liquefied natural gas plant, but no agreement was even signed despite a report by Bloomberg News that talks had been revived.
Shares of Ratio, which has a 15% stake in Leviathan, ended down 1.2% at 2.26 shekels (64 cents). Delek Drilling, which controls 45% of Leviathan, fell 0.5% to 9.27, but the news of the Egyptian-Cypriot plan wasn’t all bad for Delek, which owns 30% of Aphrodite.
Noble has 35% and Shell controls the rest of the field, which was discovered in 2011 and is estimated to hold 12 billion cubic meters of gas. The two fields lie just 20 miles apart.
Cypriot state radio also reported that a meeting of Cyprus, Greece, Egypt and Italy will be held in early December to sign a memorandum of understanding for building a pipeline from eastern Mediterranean gas fields to Italy via Cyprus and Greece, a project supported by the European Union.
Meanwhile, Delek Energy, the parent company of Delek Drilling, indicated it was moving forward to sell what is known as overriding royalties in its Tamar gas field at a valuation of as much as 900 million shekels.
The money is paid to Delek Group from revenues generated from the Tamar gas field and are paid out before Delek Drilling pays dividends to the holders of its participation units. The royalties have amounted to 3% of revenues but are due to rise to 13%.
In its third-quarter financial report on Wednesday, Delek Energy said it had made a “strategic decision” to sell the royalties and was considering one of two options – either to set up a special-purpose vehicle that would float shares on the TASE and use the proceeds to buy the royalties from Delek, or to sell the royalties to a group of institutional investors.
Delek Group faces a government deadline to divest its stake in Tamar by 2020 and sold off a 9.25% share earlier this year to a newly created company called Tamar Petroleum.
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