Gas Discoveries in the East Mediterranean Basin and the acquisition of EMG’s pipeline in context: A Review of Domestic and Geopolitical Challenges

On 26 September 2018 the ‘most significant energy deal’ in the Eastern Mediterranean Basin was concluded. Under this deal, Israel’s Delek Drilling LP, Noble Energy Inc., and Egyptian East Gas Co. buy a 39% stake in the pipeline owner Eastern Mediterranean Gas Co. (EMG) for $ 518 million, with Delek and Noble contributing $185 million each and the remainder being paid by East Gas. As further explained below, this deal grants the buyers exclusive rights to lease and operate EMG’s subsea gas pipeline, which runs from Ashkelon (southern Israel) to Egypt (the Sinai Peninsula). Delek and Nobel, who are also partners in Israeli gas reservoirs (Tamar and Leviathan), designate this pipeline for the export of 64 million cubic meters of gas to Egypt over 10 years. This deal was welcomed and endorsed by both Egypt and Israel. To properly grasp the significance of this deal and to better understand why two countries that rarely agree on regional issues put forth a uniform front on this matter, it is necessary to take a step back and review the broader normative and factual context in which this deal arises. That is the focus of the following review of gas discoveries in the East Mediterranean Basin (EMB). Read more ...

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