Israel has agreed to ship extra pure fuel to Egypt, probably stabilizing future LNG exports to Europe as Egypt balances requires extra provide and home demand.
Israeli Vitality Minister Israel Katz mentioned in a put up on X, previously Twitter, that he had signed an settlement with Egypt to permit for added fuel sources from the Tamar subject to be exported.
“The step will enhance the state’s revenues and strengthen the political relationship between Israel and Egypt,” Katz mentioned Wednesday. The ministry had not disclosed particulars on the volumes that could possibly be added to Israel’s already prolific exports to Egypt.
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Israel has two developed pure fuel fields, Tamar and the bigger Leviathan, however the nation has no liquefaction services. Israel began fuel exports to Egypt final yr. Since then, Israel has delivered a mean of 5 billion cubic meters/yr (Bcm/y) of fuel to Egypt by way of the Ashkelon-Arish subsea Japanese Mediterranean Gasoline (EMG) pipeline.
Chevron Corp., which operates the Tamar and Leviathan fields, reported common Tamar manufacturing final yr at 216 MMcf/d. Leviathan manufacturing was reported at 386 MMcf/d. Final yr, Chevron and the Tamar companions sanctioned a 3rd pipeline from the Tamar subject to extend capability.
Katz’s announcement of the settlement got here after a sequence of X posts pushing again on criticism of Israel’s export plan. Israeli Price range Director Yogev Gardos, in a letter to the Vitality Ministry in June, said that Israel wanted to look at its export insurance policies, given the rise in home fuel demand.
The Tamar and Leviathan fields meet round 70% of Israel’s electrical energy demand, based on the Worldwide Vitality Company. The remaining consumption is met by coal and a rising quantity of photo voltaic era.
In 2022, the nation launched its fourth spherical of bids for offshore exploration licenses, providing 25 blocks. Israel’s confirmed fuel reserves had grown on the finish of final yr to 1,087 Bcm from 780 Bcm in 2012, based on a latest report commissioned by the Israeli Pure Gasoline Commerce Affiliation.
The settlement with Israel comes as Egypt prepares to restart LNG exports to Europe after nearly three months of absence from the market. Whereas imports of pipeline fuel from Israel and Jordan have helped Egypt revive plans of changing into a serious fuel exporter, it has additionally coincided with an increase in home fuel consumption.
As scorching warmth settled in over the area, Egypt and Jordan imported one LNG cargo every throughout the month of July to satisfy demand for gas-fired energy era, based on Kpler information.
The squeeze on Egyptian output has additionally meant much less obtainable LNG provide for Europe.
Egypt, Israel and the European Union signed cooperative agreements final yr for pure fuel provide. After the agreements, LNG output to bloc international locations grew from 1 million tons (Mt) in 2021 to three.3 Mt, based on Kpler. Thus far this yr, 0.78 Mt of Egyptian LNG has made its strategy to EU international locations.Notably, Dutch Title Switch Facility spot costs have comparatively collapsed versus the identical interval final yr, giving much less incentive for Egypt to prioritize exports over home provide.
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