Israel is significantly increasing the amount of natural gas it plans to export via the EMED Pipeline to Egypt under a landmark deal, Israeli energy companies said on Wednesday.
Partners in Israel's Leviathan and Tamar offshore gas fields agreed last year to sell $15 billion worth of gas to a customer in Egypt in what Israeli officials called the most significant deal to emerge since the neighbors made peace in 1979.
The amended agreement sees a 34% increase in exports to about 85 billion cubic meters (bcm). One source in the Israeli energy industry estimated the value of gas was now $19.5 billion - $14 billion coming from Leviathan and $5.5 billion from Tamar.
Texas-based Noble Energy, Israel's Delek Drilling and Ratio Oil own Leviathan. Noble, Delek Drilling, Isramco and Tamar Petroleum are leading partners in the Tamar field.
Noble and Delek Drilling have also partnered Egyptian East Gas Co in a venture called EMED, which agreed around a year ago to buy into the subsea EMG pipeline that will carry the gas.
An Israeli antitrust regulator gave approval on Wednesday for the EMG deal but said the export price could not be lower than the price of gas they sold to the domestic market.
Delek Drilling said EMED has deposited $370 million and expects to pay the remainder of a total $520 million payment in the coming days ahead of the completion of the EMG transaction and pipeline performance tests.
The Tamar and Leviathan partners have also agreed on the allocation of capacity in the pipeline, Delek Drilling said.
In a joint statement, the Israeli companies said the amount to be sold from the Leviathan field will nearly double to 60 bcm of gas over 15 years. Exports from the nearby Tamar field will be reduced to 25.3 bcm from 32 bcm over the same period.
The customer in Egypt is a private firm, Dolphinus Holdings, that according to the original agreement plans to supply large industrial and commercial consumers in Egypt.
Under the amended deal, supplies will begin on Jan. 1 and continue through 2034. The companies will sell 2.1 bcm a year, which will grow to 6.7 bcm annually from the third year on.
The companies had initially hoped commercial exports would begin in 2019.
"This transaction will open the door for further investments in the regional energy market, providing cheaper and cleaner energy to the citizens of the region," Delek Drilling CEO Yossi Abu said.