UK's Energean inks 15-yr transmission deal for Israeli gas pipeline
British gas producer Energean said on Friday it had signed a 15-yr transmission agreement for Israel's planned Nitzana pipeline to Egypt, as part of its broader $4 B worth of Israeli gas offtake contracts.
The deal with state-owned pipeline operator Israel Natural Gas Lines covers the transmission of up to 1 Bm3y of natural gas, Energean said, with options for extension and early termination.
The Nitzana pipeline will run from Ramat Hovav in southern Israel to the Egyptian border near Nitzana and is expected to be operational within three years, pending transmission agreements from all parties involved, Energean said.
The pipeline would ease an energy crisis in Egypt, which has spent billions of dollars on importing liquefied natural gas (LNG) and is part of a concerted effort to boost Israeli gas exports to the Arab world's most populous nation.
It is expected to transport around 600 MMft3d of natural gas, bringing Israel's total export capacity to Egypt to more than 2.2 Bft3d.
Energean Israel will fund 16.4%, or around $100 MM, of the pipeline and compression station construction costs, the company said.
The company also signed a non-binding term sheet with an East Mediterranean client for future gas offtake.
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