Israeli gas company announces $15bn export deal with Egypt

A gas platform in the Mediterranean sea west of Israel’s port city of Ashdod. Delek Drilling and its US partner, Noble Energy have signed a deal to sell a total of 64 billion cubic meters of gas over a 10-year period to Egyptian company Dolphinus Holdings. (Reuters)
Updated 19 February 2018
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Israeli gas company announces $15bn export deal with Egypt

JERUSALEM: An Israeli energy company on Monday announced a $15 billion deal to supply natural gas to Egypt, in the largest export agreement to date for Israel’s nascent natural gas industry.
Delek Drilling and its US partner, Noble Energy, signed a deal to sell a total of 64 billion cubic meters of gas over a 10-year period to Egyptian company Dolphinus Holdings.
Yossi Abu, chief executive of Delek Drilling, called the deal “great news” for both countries.
He said he expects most of the gas to be used for Egypt’s domestic market, but predicted it could pave the way for wider cooperation and help turn Egypt into an export hub for Israeli gas.
“I think that the main thing is that Egypt is becoming the real gas hub of the region,” he said.
Egypt was the first Arab country to make peace with Israel, in 1979, but past economic agreements have been controversial in Egypt, where support for the Palestinians runs high. There was no immediate comment from Egyptian officials.
The gas will be delivered from Israel’s Tamar gas field, which is already operational, and the larger “Leviathan” field, which is set to go online in late 2019. The gas is expected to begin flowing late next year.
Several routes for shipping the gas are under consideration, with an existing pipeline between Jordan and Egypt a strong contender, Abu said. Israel already delivers gas to Jordan.
Israel has been developing natural gas fields off its Mediterranean coast for the past decade. In 2016, Delek and Noble signed Israel’s first export agreement, reaching a $10 billion, 15-year deal to provide 45 billion cubic meters of gas to Jordan.
The gas deals reflect Israel’s shared strategic interests with Jordan and Egypt, both of which are important US allies.
Israel maintains quiet security ties with both countries, particularly Egypt, which is battling an Islamic militant insurgency in its Sinai desert, near the Israeli border.
Israeli Energy Minister Yuval Steinitz called the deal a “very important milestone.”
“It is the first time since the signing of the peace agreements with Egypt and Jordan that there are big, significant, serious export deals between Israel and the Arab world,” he told Army Radio.
Prime Minister Benjamin Netanyahu hailed what he called “the historic agreement,” saying it would provide billions of dollars to state coffers as well.
Netanyahu said the deal validated his government’s controversial 2016 agreement with the Delek consortium to develop Israel’s gas fields. Critics, including opposition lawmakers, complained it was skewed in favor of the companies.
“This is a joyous day,” he said.


Singapore woes ring trade alarm bells

Singapore has long been viewed as a barometer of the global demand for goods and services. (AFP)
Updated 22 July 2019
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Singapore woes ring trade alarm bells

  • Governments have slashed economic growth forecasts, and gauges in several countries measuring activity in the manufacturing and services sectors paint a bleak picture

SINGAPORE: A plunge in exports and the worst growth rates for a decade have fueled concerns about the outlook for Singapore’s economy, with analysts saying the figures offer a warning that Asia is heading for a slowdown as China-US tensions bite.
While it may be one of the smallest countries in the world, the export hub is highly sensitive to external shocks and has long been viewed as a barometer of the global demand for goods and services.
The affluent city-state is highly dependent on trade and has traditionally been one of the first places in Asia to be hit during global downturns — with ripples typically spreading out across the region. The latest signs are not good. In June, exports collapsed 17.3 percent from a year earlier, the fastest decline in more than six years, led by a fall in shipments of computer chips.
That followed a shock 3.4 percent quarter-on-quarter contraction in GDP in the second quarter. Year-on-year growth came in at just 0.1 percent, the slowest pace since 2009 during the global financial crisis.
“Singapore is the canary in the coal mine,” Song Seng Wun, a regional economist with CIMB Private Banking, told AFP. “And what it tells us is that it is a tough environment.”
To warn of danger, miners used to bring caged canaries underground with them as the birds would die in the presence of even a small amount of poisonous gas — signaling to workers that they should make a swift exit.

BACKGROUND

In June, exports in Singapore collapsed 17.3 percent from a year earlier, the fastest decline in more than six years, led by a fall in shipments of computer chips.

While steadily weakening growth in China is partly to blame for a slowdown in exports, analysts say the trade war between the US and China has dramatically worsened the situation.
While Singapore — a transit point for products heading to and from Western markets as well as the Asian base for manufacturers of some hi-tech goods — may be showing the strain most, negative data has emerged throughout the region.
Exports have been slipping across Asia. In India they plummeted 9.7 percent in June, in Indonesia, Southeast Asia’s biggest economy, they dropped 8.9 percent in the same month while in South Korea they slipped 10.7 percent in May.
Governments have slashed economic growth forecasts, and gauges in several countries measuring activity in the manufacturing and services sectors paint a bleak picture.
Central banks are moving to spur domestic consumption, with Indonesia and South Korea cutting interest rates Thursday, the latest in Asia to lower borrowing costs.
Singapore’s central bank is seen as likely to ease monetary policy at an October meeting, and some economists are predicting the country could fall into recession next year.
“There are no winners in this trade war. While most of the attention has focused on the trade conflict between China and the US, the damage has not been confined to these two economies,” business consultancy IHS Markit said in a commentary.