Dolphinus Holdings, an Egyptian gas trading company, expects to sign a final accord for natural gas imports from Israel’s Leviathan field in the next four to six months.
Dolphinus hopes to get the necessary approval from the Egyptian government in a “few months,” co-founder Khaled Abu Bakr said by phone from Paris. The company has the support of a “large shareholder” in the Arish–Ashkelon pipeline, which links Israel to Egypt’s Arab-Gas Pipeline, and is discussing fees, Abu Bakr said, without identifying the shareholder.
An agreement would alleviate an energy shortage in Egypt that has cut industrial output and may also help to position the country as a transfer point for eastern Mediterranean gas, where Israel, Cyprus and Egypt itself have made large discoveries. The government ended a state monopoly on importing and exporting gas earlier in February.
“We’re betting on the liberalization of Egypt’s energy market that will allow the private sector to import its own gas,” Abu Bakr said.
Dolphinus, co-founded by Abu Bakr and Egyptian businessman Alaa Arafa, is negotiating with partners in the Leviathan field to buy as much as 4 billion cubic meters of natural gas a year for 10 to 15 years. It also signed a deal to import the fuel from Israel’s Tamar offshore gas field in March.
Peace Accord
Egypt exported natural gas to Israel up until it canceled the deal in 2012 as producing wells depleted and new explorations slowed down. The two countries have resumed normal relations following the 1979 peace accord, yet sensitivities linger about doing business with Israel among many Egyptians.
Abu Bakr said political issues do not worry him and he is counting on the government’s “seriousness” in this issue.
“This is a technical opportunity that is viable economically, and I am just doing my business,” he said. “If it will not be good for the country they will tell us not to do it,” he said.
Egypt will eventually develop into a gas hub for the region, Abu Bakr said.
“After the countries in the region satisfy the demand in their local market, they will look to export,” he said. “Egypt has the infrastructure to become the main transport point for all this gas.”
Source: Bloomberg
