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Leviathan gas field developers sign LOI to export gas to Egypt

The developers of the Leviathan gas field off Israel have signed a Letter of Intent (LOI) for the export of natural gas from the Leviathan Project to Egyptian consumers (non-governmental, industrial and commercial consumers grouped under the Dolphinus Holdings).

The LOI includes several commercial conditions for the proposed potential transaction, which will serve as a basis for negotiating the Binding Agreement. The estimated scope of the Binding Agreement is the supply of 4 bcm/year for a period of 10-15 years. Gas would be transported through the transmission system of Israel Natural Gas Lines (Natgaz) to Ashkelon and from there to the local market in Egypt using the existing pipeline operated by EMG.

The price of gas would be similar to the prices set in other agreements for the export of gas from Israel to regional markets and is essentially based on a formula that includes linkage to the price of a barrel of Brent oil and includes a "floor price".

The Leviathan gas field is operated by Noble Energy (39.66%), Avner Oil Exploration (22.67%), Delek (22.67%) and Ratio Oil Exploration (15%). It is estimated to hold 622 bcm of gas and would start production in 2019 or 2020.