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Israel approves new route for gas exports to Egypt via Jordan

Highlights

Flows seen at 2.5-3 Bcm in 2022, then up to 4 Bcm/year

First deliveries expected in February

Israeli gas usually flows via reversed EMG line

  • Author
  • Stuart Elliott
  • Editor
  • Kshitiz Goliya
  • Commodity
  • LNG Natural Gas

Israel's energy ministry has approved the start of gas flows to Egypt via Jordan, with first supplies expected to begin before the end of February.

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At present, Israeli gas from its offshore Leviathan and Tamar fields is delivered to Egypt via Israel's own transmission system before flowing to Egypt via the now-reversed offshore East Mediterranean Gas, or EMG, pipeline.

However, with Egyptian demand for Israeli gas set to grow, the ministry approved the use of the Jordan route which will take gas to Aqaba and then onto Egypt.

"Exports via the route are expected to be 2.5-3 Bcm in 2022 and may even increase to 4 Bcm in subsequent years," the ministry said in a statement Feb. 16.

"The actual flow of gas is expected to begin during the current month (February 2022) and significantly increase the volume of gas exported to neighboring countries relative to exports in recent years," it said.

"Further exports of gas on such a large scale are expected to increase state revenues from taxes and royalties," it said.

The EMG line started operations in 2008 to flow Egyptian gas to Israel and ran until 2012 when operations were halted as Cairo's gas production began to decline after the Arab Spring the previous year.

The pipeline -- with a design capacity of 7 Bcm/year -- was then reversed in 2019 to enable Israel-Egypt flows.

Regional benefit

The new gas exports to Egypt will flow from Israel's offshore fields into its gas network, entering the Jordan gas transmission system at Beit She'an.

"It should be noted that gas will flow in this route during the hours and days when there is available capacity in the Israeli transmission system and low demand in the local economy so that the transmission does not compete with the consumption of the local market," the ministry said.

"Beyond the economic benefits, the export of gas to countries in the region strengthens Israel's geopolitical ties with neighboring countries, strengthens the energy security of the countries of the region, and leads the Eastern Mediterranean to a cleaner economy."

Leviathan, which holds an estimated 649 Bcm of gas, started production in December 2019, with exports to Egypt beginning the following month using existing gas infrastructure and a reversed EMG pipeline to Arish in Egypt.

Gas is delivered under a long-term agreement with Egypt's Dolphinus Holdings, which in February 2018 agreed to take a total of 64 Bcm of gas from Leviathan and Tamar to Egypt over a 10-year period.

The contracts were then extended to 15 years and total volumes contracted raised to 85 Bcm, with Leviathan gas making up more of the share of the supply mix between the two fields.

In February 2021, the energy ministers of Israel and Egypt also agreed to pursue the construction of a new gas pipeline linking Leviathan directly to Egypt's two LNG export facilities at Idku and Damietta from Leviathan.