Leviathan Partners Sign Preliminary Agreement to Supply Gas to Egypt

Leviathan Partners have signed a preliminary agreement to supply gas to Egypt.

According to a statement published Wednesday, the Leviathan Partners and Dolphinus Holdings have signed a non-binding letter of intent in which the parties confirmed their intention to carry out negotiations on an agreement for the supply of natural gas from the Leviathan project using the existing gas pipeline operated by East Mediterranean Gas Limited (EMG).

As per the preliminary agreement Leviathen Partners will supply of 4 billion cubic meters (bcm) of gas per annum for a period of 10-15 years. The gas would be transported using the transmission system of Israel Natural Gas Lines Ltd (Natgaz) to Ashkelon and from there to the local market in Egypt using the existing pipeline operated by EMG.

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

The agreement will be subject to several contingent conditions, including approval of the development plan for the Leviathan field and final investment decision (FID) by the Leviathan Partners.

Dolphinus represents a consortium of major Egyptian non-governmental industrial and commercial gas consumers, gas distributors and entrepreneurs. 

Partners in the Leviathan Project are, Noble Energy Mediterranean Ltd., Avner Oil Exploration - Limited Partnership, Delek Drilling Limited Partnership and Ratio Oil  Exploration (1992), Limited Partnership.