Israel, Egypt Ministers Said to Discuss Potential Gas Exports

CAIRO (Capital Markets in Africa) – Ministers from Egypt and Israel held a call last week to discuss the potential sale of Israeli gas to Egypt, according to a person with direct knowledge of the matter.

Egyptian Oil Minister Tarek El-Molla and Israel’s energy minister, Yuval Steinitz, spoke after an interview El-Molla gave to Bloomberg earlier this month sent shares of Israeli gas companies tumbling on speculation Egypt would halt talks on buying gas from Israel, the person said. El-Molla told Steinitz that Israeli gas exports to Egypt, which would be carried via pipeline, are still on the table, the person said.

Shares of Israeli gas producers extended their gains, with Delek Group Limited closing 6.9 percent higher in Tel Aviv on Sunday.

El-Molla said the main obstacle to any Israel-Egypt deal is the $2 billion fine a Swiss court determined Egypt’s natural gas companies must pay to Israel’s electricity provider for a previous deal, the person said. El-Molla said any progress on Israel-Egypt gas talks is contingent on first resolving that stand-off, the person said.

Israel is looking to export gas to neighbours from its offshore fields but the Egyptian government froze talks after the Swiss ruling in April, saying any new deal should include a resolution to pending arbitration cases. The partners in the Leviathan field, Israel’s biggest offshore site, view Egypt as a potential market for their gas. Houston, Texas-based Noble Energy Inc. and Israel’s Delek Group hold the biggest stakes in the gas pool.

Spokespersons for Egypt’s Oil Ministry and Israel’s Energy Ministry declined to comment.

Source: Bloomberg Business News