Israel starts exporting natural gas to Egypt under landmark deal

The gas is being supplied via a subsea pipeline connecting Israel and Egypt’s Sinai peninsula. (File/AFP)
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Updated 15 January 2020

Israel starts exporting natural gas to Egypt under landmark deal

  • A private firm in Egypt, Dolphinus Holdings, will purchase 85 billion cubic meters (bcm) of gas, worth an estimated $19.5 billion, from Israeli fields
  • Israeli officials have called the export of gas to Egypt the most significant deal to emerge since the countries signed a historic peace treaty in 1979

JERUSALEM/CAIRO: Israel began exporting natural gas to Egypt on Wednesday under one of the most important deals to have been signed by the neighbors since they made peace decades ago.
A private firm in Egypt, Dolphinus Holdings, will purchase 85 billion cubic meters (bcm) of gas, worth an estimated $19.5 billion, from Israel’s Leviathan and Tamar offshore fields over 15 years.
Yossi Abu, CEO of Israel’s Delek Drilling, one of the partners in Leviathan and Tamar, said the landmark arrangement “marks a new era in the Middle East energy sector.”
Israel will initially export 200 million cubic feet of gas per day to Egypt, two Egyptian industry sources said. Gas from Leviathon will be supplied to Dolphinus at a rate of 2.1 bcm per year, rising to 4.7 bcm per year by the second half of 2022, according to Delek.
The gas is being supplied via a subsea pipeline connecting Israel and Egypt’s Sinai peninsula.
Exports of Tamar gas to Dolphinus are expected to start later this year.
Israeli officials have called the export of gas to Egypt the most significant deal to emerge since the countries signed a historic peace treaty in 1979.
Egypt is hoping the deal will help it become a regional energy hub, with some of the gas expected to be re-exported to Europe through liquefied natural gas (LNG) plants.
The North African country is currently exporting one billion cubic feet of gas to Europe every month via 10 shipments, the country’s petroleum minister said in remarks published on Wednesday.
Tarek El Molla also told El Watan newspaper that Egypt wanted to boost gas shipments to Europe to 20 a month after restarting the Damietta LNG plant.
Damietta has been idled for years due to a lack of gas supply during a dispute with Union Fenosa Gas (UFG), a joint venture between Spain’s Gas Natural and Italy’s Eni.
Damietta is 80% owned by UFG, with the remaining 20% split evenly between the state-owned Egyptian Natural Gas Holding Company and the Egyptian General Petroleum Corporation.
Molla also said Egypt was planning a bidding round for oil drilling in the western Mediterranean Sea and was in talks with Chevron, Exxon Mobile and Total.


S&P 500 inches closer to record high

Updated 5 min 54 sec ago

S&P 500 inches closer to record high

  • US stock market index returns to levels last seen before the onset of coronavirus crisis

NEW YORK: The S&P 500 on Tuesday closed in on its February record high, returning to levels last seen before the onset of the coronavirus crisis that caused one of Wall Street’s most dramatic crashes in history.

The benchmark index was about half a percent below its peak hit on Feb. 19, when investors started dumping shares in anticipation of what proved to be the biggest slump in the US economy since the Great Depression.

Ultra-low interest rates, trillions of dollars in stimulus and, more recently, a better-than-feared second quarter earnings season have allowed all three of Wall Street’s main indexes to recover.

The tech-heavy Nasdaq has led the charge, boosted by “stay-at-home winners” Amazon.com Inc., Netflix Inc. and Apple Inc. The index was down about 0.4 percent.

The blue chip Dow surged 1.2 percent, coming within 5 percent of its February peak.

“You’ve got to admit that this is a market that wants to go up, despite tensions between US-China, despite news of the coronavirus not being particularly encouraging,” said Andrea Cicione, a strategist at TS Lombard.

“We’re facing an emergency from the health, economy and employment point of view — the outlook is a lot less rosy. There’s a disconnect between valuation and the actual outlook even though lower rates to some degree justify high valuation.”

Aiding sentiment, President Vladimir Putin claimed Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval’s speed has concerned some experts as the vaccine still must complete final trials.

Investors are now hoping Republicans and Democrats will resolve their differences and agree on another relief program to support about 30 million unemployed Americans, as the battle with the virus outbreak was far from over with US cases surpassing 5 million last week.

Also in focus are Sino-US tensions ahead of high-stakes trade talks in the coming weekend.

“Certainly the rhetoric from Washington has been negative with regards to China ... there’s plenty of things to worry about, but markets are really focused more on the very easy fiscal and monetary policies at this point,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

Financials, energy and industrial sectors, that have lagged the benchmark index this year, provided the biggest boost to the S&P 500 on Tuesday.

The S&P 500 was set to rise for the eighth straight session, its longest streak of gains since April 2019.

The S&P 500 was up 15.39 points, or 0.46 percent, at 3,375.86, about 18 points shy of its high of 3,393.52. The Dow Jones Industrial Average was up 341.41 points, or 1.23 percent, at 28,132.85, and the Nasdaq Composite was down 48.37 points, or 0.44 percent, at 10,919.99.

Royal Caribbean Group jumped 4.6 percent after it hinted at new safety measures aimed at getting sailing going again after months of cancellations. Peers Norwegian Cruise Line Holdings Ltd. and Carnival Corp. also rose.

US mall owner Simon Property Group Inc. gained 4.1 percent despite posting a disappointing second quarter profit, as its CEO expressed some hope over a recovery in retail as lockdown measures in some regions eased.

Advancing issues outnumbered decliners 3.44-to-1 on the NYSE and 1.44-to-1 on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new low, while the Nasdaq recorded 50 new highs and four new lows.