Delek Group Ltd. (DLEKG) unit Delek Drilling LP (DEDR.L) and Noble Energy Inc. (NBL) have announced that together with Egyptian company East, they are acquiring a 39% stake in the EMG Egypt-Israel gas pipeline. The companies will pay $518 million for the stake with Delek and Noble paying $185 million each and the balance by East, Globes reports.
As part of the deal, Delek Drilling and Noble Energy will receive exclusive rights to lease and operate EMG's pipeline, which links Ashkelon in southern Israel and Egypt via El Arish in the Sinai.
The EMG transaction will provide a solution for Leviathan partners Delek and Noble Energy, which have signed a $15 billion deal to sell 64 BCM of natural gas to Egyptian company Dolphinus. Leviathan gas is due to begin flowing next year, although Noble Energy states that Dolphinus will be supplied with gas from the Tamar field before then.
Delek Drilling CEO Yossi Abu said, "The Leviathan field is becoming the central energy anchor in the Mediterranean basin with customers in Israel, Egypt and Jordan."
Noble Energy SVP Offshore J. Keith Elliott said, “Today’s announcements mark significant steps forward in supplying natural gas from the world-class Tamar and Leviathan fields to regional customers through existing infrastructure. They also represent another major milestone toward Egypt’s goal to become a regional energy hub, providing access to both growing domestic markets and existing LNG export facilities. With these agreements, we are securing the capacity to deliver on our firm gas sales agreement with Dolphinus for Leviathan while also allowing for interruptible sales from Tamar into Egypt. This further solidifies the strong cash flow growth anticipated from our Eastern Mediterranean assets.”