Israel and Egypt make gasfield landmark

Who says former foes cannot become friends – at least when lucrative stores of natural gas are up for grabs?

Israel and Egypt may have been in conflict multiple times since 1948, but now the two are strengthening their ties to exploit both countries’ valuable natural gas reserves.

Joined-up thinking

The two are in advanced talks to build a new underwater natural gas pipeline, though no deal has yet been signed, according to Yuval Steinitz, Israel’s energy minister. The minister’s comments were made on January 15 during a regional gas forum in Cairo, the Egyptian capital.

Mr Steinitz is the first Israeli minister to travel to Egypt since the removal of former Egyptian president Hosni Mubarak in 2011.

“The gas partnership between Egypt and Israel reflects how much relations between the two countries have strengthened since Abdel Fattah Al Sisi took over as president,” says Anthony Skinner, director on the Middle East and north Africa team at risk advisory Maplecroft. “The level of mutual dependency runs deeper than during the years of Mr Mubarak.”

The pipeline would supplement an existing line of 7 billion cubic metres per year, allowing even more of Israel’s gas from its Leviathan and Tamar fields to flow to processing facilities in Egypt. 

Italy’s ENI is currently producing some 56 million cubic metres of gas per day in Egypt’s offshore Zohr gas fields, the largest known reserves in the Mediterranean.

“Making Israel dependent on Egypt as a processing hub and energy conduit helps strengthen Israel’s already robust commitment to the security and tenure of Mr Al Sisi’s regime,” says Mr Skinner.

A forum for debate

The pipeline talks come days after a group of countries announced the creation of the Eastern Mediterranean Gas Forum, a move aimed at consolidating the growing regional gas market. Egypt, Cyprus, Greece, Israel, Italy, Jordan and Palestine have all signed on. The forum will be based in Cairo.

Israel and Egypt in particular will be deeply linked, both through the forum and a landmark deal inked a year ago to export $15bn-worth of Israeli gas to Egypt over a decade. The two countries purchase a 39% stake in a 90-kilometre pipeline in September 2018, with expectations that gas should start flowing in early 2019.

Israel’s Delek Drilling and US company Noble Energy are expected to announce an additional deal to export another 12 billion cubic metres of Israeli and Cypriot gas to Egypt’s Indku processing facility, though that has been held up by a dispute between the two exporting countries.