Companies extracting natural gas from the Tamar gas field said they signed a memorandum of understanding to sell natural gas to the Spanish company Union Fenosa, which co-owns a factory with the Italian company Eni to export liquefied natural gas in Damietta, Egypt.
The Israeli Calcalist website said the agreement, which was signed on Monday evening, is the first contract to sell Israeli gas to Egypt, adding that the two sides are signing a formal agreement in six months for Israel to supply an annual 4.5 billion cubic meters of natural gas to Egypt for 15 years, a fifth of the field’s total production capacity.
It also said that the contract is worth US$20 billion and that the gas would be supplied through a pipeline from Tamar to the shores of Egypt 300 kilometers away, the cost of which would be borne by the purchaser.
Union Fenosa is one of the largest liquefied gas companies in the world. Together with Eni, it owns 80 percent of the Damietta factory, the rest of which is owned by the Egyptian General Petroleum Corporation and the Egyptian Natural Gas Holding Company (EGAS).
The website also said that Israel is signing a similar agreement with British Gas, which also owns a factory in northern Egypt. It has been operating in Egypt for 25 years, producing a third of domestic natural gas consumption.
The Tamar field contains 320 billion cubic meters of natural gas.
The newspaper quoted Keith Elliott, vice president of Noble Energy that owns 36 percent of the field, as saying that the gas price will be the same as that of Brent crude oil and will have a provision for a gradual increase.
Meanwhile, the Egyptian cabinet denied rumors about the government's intention to import natural gas from Israel, saying Egyptian companies did not sign any agreements in this regard.
It also said that no Egyptian or foreign company is allowed to contract gas imports from anywhere without prior approval from the government.
Edited translation from Al-Masry Al-Youm
