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Israeli gas exports to Egypt resume after ceasefire: Delek

Israeli gas exports to Egypt via the EMG pipeline located offshore the Gaza Strip have resumed, Israeli gas producer Delek Drilling said May 23, following a ceasefire agreement between Israel and Hamas.

The recent conflict began on May 10, with rockets fired at Israeli cities from the Gaza Strip and the Israeli military carrying out air strikes in Gaza. Hamas also reportedly said it had targeted offshore gas installations.

The violence saw operator Chevron shut in the Tamar platform, while exports to Egypt via the EMG pipeline were also suspended.

Delek is a partner together with Chevron at both Tamar and in the EMG pipeline.

Chevron said May 21 that it had been instructed by the Israeli energy ministry to restart Tamar, while Delek added May 23 that the flow of gas to Egypt had also now resumed.

“The cessation of production will not have a material effect on [Delek’s] revenues from the sale of gas in the second quarter of the year,” it said in a short statement.

It was not the first time that the Tamar platform — which is thought to be within the range of Palestinian rockets — had been shut in because of conflict in the region.

In May 2019, Israel decided to halt gas supplies from the platform after an increase in cross-border fighting between Palestinian militants and Israeli soldiers that lasted for three days.

Chevron operates Tamar with a 25% stake. Its partners are Delek Drilling (22%), Isramco (28.75%), Tamar Petroleum (16.75%), Dor Gas (4%) and Everest (3.5%).

Delek sale

The conflict between Israel and Hamas came as Delek prepares the sale of its 22% stake in Tamar to the UAE’s Mubadala Petroleum.

Delek — which also has a stake in the larger Leviathan gas field — must sell its stake in Tamar by the end of this year under a government framework to open the Israeli gas sector to competition.

Delek signed a non-binding memorandum of understanding with Mubadala for the sale of its Tamar stake in late April and pledged to work with the UAE-based company to finalize a definitive agreement by May 31.

Under the deal, the UAE company is to pay up to $1.1 billion for the stake, consisting of an unconditional payment of $1 billion and a contingent payment of up to $100 million subject to certain terms and goals being met.

If finalized, the transaction with Mubadala would be the largest commercial agreement following the signing in August 2020 of a normalization treaty between Israel and the UAE — known as the Abraham Accords Peace Agreement.

Interest in Delek’s stake was high, with discussions held with a number of potential buyers.

Source:  Platts

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