US: Leviathan signs preliminary Egypt natgas deal

Natural gas from Israel’s vast Leviathan offshore gas field will be pumped to Egypt via an existing subsea pipeline for up to 15 years under a preliminary deal announced by the field’s developers on Wednesday.

Leviathan, which is expected to begin production in 2019 or 2020, will supply Egypt’s Dolphinus Holdings with up to 4 billion cubic metresof gas a year for 10 to 15 years, the companies said in a statement to the Tel Aviv Stock Exchange.

Signing a letter of intent, the two sides agreed to negotiate terms for a final deal.

The price of gas is similar to other contracts and is linked to the cost of Brent oil and includes a floor price, they said.

“We’ve worked with Dolphinus before and we expect to reach a final agreement quickly,” Yossi Abu, chief executive of Israel’s Delek Drilling, told Reuters.

Development of Leviathan, which holds an estimated 622 bcm of gas, is being led by Texas-based Noble Energy and Delek Group through its units Delek Drilling and Avner Oil and Gas.

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