Egypt, EU and Israel sign agreement to export natural gas to Europe

Ahram Online , Wednesday 15 Jun 2022

Egypt, EU and Israel signed on Wednesday in Cairo a framework agreement to export natural gas from Israel via Egypt to Europe.

Gas deal
Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla (C), EU Commission for Energy Kadri Simson (L) and Israeli Minister of Energy Karine Elharrar (R) - and looking is the President of the European Commission with Ursula von der Leyen.


"With this agreement we will work on the stable delivery of natural gas to the EU from the East Med region. This will contribute to our EU energy security. And we are building infrastructure fit for renewables - the energy of the future," tweeted Ursula von der Leyen, the President of the European Commission, after she witnessed the signing ceremony.

The framework agreement was signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla , EU Commission for Energy Kadri Simson and Israeli Minister of Energy Karine Elharrar during the ministerial meeting of the East Mediterranean Gas Forum (EMGF) in Cairo. 

In a joint news conference, Minister El-Molla said that the agreement is an important step to boost the relations EU in the East Mediterranean region between Egypt, Israel and the EU.

Meanwhile, Minister Elharrar said that Egypt and Israel have committed to exchange natural gas with Europe to help in facing the current energy crisis.

“Egypt and Israel ensure through their partnership better energy security for our European partners,” she said.

Elharrar also explained that the agreement with the EU would continue for three years with an automatic two-year extension.

"What a special moment,'' von der Leyen said alongside Egyptian and Israel energy ministers.

"I very warmly welcome the signing of this historic agreement,' she added.

The EMGF was established in 2019 as an international organisation and headquartered in the capital of Egypt.

It aims to establish a regional gas market in the eastern Mediterranean and enhance trade relations among member states.

The forum comprises Egypt, Palestine, Jordan, Greece, Cyprus, Italy, and Israel.

In early June, the EU Commissioner for Neighbourhood and Enlargement Olivér Várhelyi explained in an interview with Ahram Online that, as per the agreement, gas would be brought from Israel to the EU after being liquified in Egypt.

During her visit to Israel on Tuesday, von der Leyen tweeted “Tomorrow we’ll take an important step, with the signing of a trilateral agreement on gas between Israel, the EU and Egypt. And we will join forces to help protect the world from a major food crisis.” 

Egypt: From self-sufficiency to major supplier

The Russian-Ukrainian war – which has caused global prices of oil and gas to rise – has led Germany, like other European countries, to seek to diversify its energy sources in order to decrease dependency on Russian gas.

The EU imports the vast majority of the gas it consumes, with Russia accounting for around 45 percent of imports in 2021, according to the International Energy Agency (IEA). 

After achieving self-sufficiency in natural gas in 2018, Egypt has planned to use its position on Europe’s doorstep to become a major supplier of liquefied natural gas (LNG) to the continent, which is transitioning away from other fossil fuels. This is based on Egypt’s huge gas discoveries and production, which is expected to rise to 7.5 million tonnes by the end of the 2021/2022 fiscal year.

Egypt has made a series of oil and gas discoveries in recent years, most notably the giant Zohr gas field off the Mediterranean. The gas field, which holds an estimated reservoir of 30 trillion cubic feet of gas, has drawn the interest of investors to the country’s energy sector.

Egypt also has the infrastructure for transporting and handling natural gas with a network of 7,000km of pipelines, a distribution network of 31,000km, and 29 gas-treatment plants as well as two LNG facilities – Idku and Damietta plants.

Egypt has previously reached trade agreements with Israel and Cyprus to import gas from these two countries, process it in the Egyptian liquefaction plants in Idku and Damietta, and then re-export it to European and Asian markets. According to data from the Ministry of Petroleum and Mineral Resources, Idku and Damietta plants have an annual production capacity of 7.2 million and 4.8 million tonnes, respectively.

In 2021, Egypt had the highest income from LNG exports in 10 years, with revenues jumping by 550 per cent, to $3.9 billion, up from $600 million in 2020. Egyptian LNG exports to Europe soared during this period as well, reaching 2.04 million metric tonnes, compared to only 270,000 metric tonnes in 2020.

Egypt - Israel cooperation on natural gas

In November 2021, Egypt and Israel signed an MoU to increase natural gas supplies from Israel to Egypt for re-export.

The MoU also includes the possibility of using the existing pipeline between the two countries to transport hydrogen in the future

In early 2020, Israel began exporting natural gas to Egypt from their Leviathan and Tamar offshore fields under a 15-year deal signed with a private firm in Egypt, Dolphinus Holdings, according to Reuters.

Under the deal, the gas is being supplied via a subsea pipeline connecting Israel and Egypt's Sinai Peninsula.

Dolphinus Holdings is using the gas imported from the two fields to supply large industrial and commercial consumers in Egypt, as well as re-exporting some to outside markets, mainly in Europe.

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