JERUSALEM – One of the developers of a natural gas field off Israel’s Mediterranean coast on Sunday said it has signed a letter of intent to provide gas to a facility in Egypt.
Delek Drilling said it is negotiating a deal to provide seven billion cubic meters of natural gas from the offshore Leviathan gas field to British company BG’s plant in Idku, Egypt, through an underwater pipeline annually for 15 years.
An industry official familiar with the deal said it could be valued at about $30 billion — which would be the largest energy deal in Israel’s history. He spoke on condition of anonymity because he was not authorized to comment on the deal.
Until recently, Egypt provided natural gas to Israel. But following the ouster of President Hosni Mubarak in 2011, supplies were disrupted and eventually halted.
Last month, Houston-based Noble Energy Inc., one of Delek’s partners, reached a preliminary deal to sell up to 2.5 trillion cubic feet of gas annually over 15 years to Union Fenosa Gas SA for its liquefied natural gas facility in Egypt.
Despite a long history of geopolitical conflict with its Arab neighbours, the discovery of large natural gas deposits off its coast has positioned Israel to become a leading energy exporter in the region.
Earlier this year, Noble Energy and its partners signed a deal with Arab Potash Co. and Jordan Bromine Co. in Jordan, and another deal with a Palestinian power company to supply gas to a power plant to be built in the West Bank.
Israel has long relied on imports to meet most of its energy needs. The gas fields are expected to supply Israel’s domestic needs for decades and could transform the country into an energy exporter.