Israel Gas Export to Egypt Delayed to Year’s End

Delek Drilling says pipeline checks have been completed but deliveries delayed

An aerial view shows the newly arrived foundation platform of Leviathan natural gas field, in the Mediterranean Sea, off the coast of Haifa, Israel January 31, 2019.
\ POOL New/ REUTERS

Delek Drilling, the Israeli energy company controlled by Yitzhak Tshuva, said on Tuesday that it has completed testing of a subsea natural gas pipeline to Egypt, but had not yet begun commercial sales by the end of June as it had initially hoped.

Delek Drilling and its partner Noble Energy signed a landmark deal early last year to export $15 billion in natural gas from Israeli offshore fields Tamar and Leviathan to a customer in Egypt. Israeli officials called it the most significant deal to emerge since the neighbors made peace in 1979.

Delek Drilling Deputy CEO Yossi Gvura told Reuters in early June that they hoped to start selling small quantities of gas to Egypt by the end of the month, but the company said on Tuesday exports had not yet begun.

>> Read more: Are Israel and Egypt now in a marriage made on gas? | Opinion 

Due to the forecast demand for gas in Israel over the summer, the company expects commercial sales to Egypt to begin only when the Leviathan field comes online by the end of 2019.

Delek and Noble have agreed to buy ia stake in the EMG gas pipeline running between Ashkelon in Israel and El-Arish in Egypt to transport the gas supplies. The pipeline was originally designed to export Egyptian gas to israel.

Now that the technical examination of the pipeline is complete, Delek said it expects to close the EMG deal by August 31.

Shares of Delek Drilling ended 0.2% higher at 10.38 shekels ($2.90).