Delek Drilling’s partner in the EMG gas pipeline to Egypt, the Egyptian company East Gas, is owned by Egypt’s intelligence service, Egyptian news site Mada Masr reported.
East Gas, the main beneficiary of plans to export Israeli natural gas to Egypt’s private consortium Dolphinus Holdings via the EMG pipeline, is a private company, most of whose shares are held by Egypt’s intelligence service, says the report.
“The gas import deal — scheduled to come into effect early next year — found that the repeated claims by Egyptian government officials that the venture is a purely private sector affair wholly outside the ‘government framework’ are misleading at best,” stated Mada Masr in its report.
The intelligence service is slated to receive 80% of East Gas’s income, it states.
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Furthermore, Egyptian intelligence also has an interest in Dolphinus, says the Egyptian news outlet.
“Documents and sources reveal that through a complex web of overseas shell corporations and subsidiaries, the intelligence body stands to cash in at all stages of the deal, from the transport of Israeli gas to Egypt to its final sale to the Egyptian government. These profits end up in the coffers of the GIS, and not the public budget,” states Mada Masr.
The news site says the intelligence service worked through shell companies in countries including the Virgin Islands, Luxembourg, Switzerland and the Netherlands, in order to conceal the identity of the Egyptian players, avoid taxes and shield them from accountability.
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Israel is supposed to start exporting gas to Egypt’s Dolphinus consortium in March 2019, via the EMG pipeline. The gas, from Israel’s Tamar and Leviathan reserves, is valued at $15 billion. Last month, Delek, Noble and East Gas announced they were buying 39% of EMG’s shares for $518 million.
Meanwhile, Egypt recently discovered its own massive offshore gas reserves. Mada Masr says the Dolphinus deal does not appear to be in Egypt’s best interests, as the Israeli gas costs significantly more than locally produced Egyptian gas.