Egypt to import gas from Israel via EMG pipeline

An Egyptian consortium and the operators of the Tamar gas field in Israel signed a contract Tuesday to import natural gas to Egypt.

According to Delek Group, part of the Israeli-American consortium that operates the gas field, it will supply Egypt with a minimum of 5 billion cubic meters of natural gas for the first three years of the contract. Over the course of seven years, the Tamar project will supply Egypt with up to 250,000 million BTUs per day.

The gas price will be in line with Israel’s other gas export deals, and will be linked to global oil prices, according to previous releases from Delek.

The gas will be transported from Ashkelon to Arish in Egypt via the Eastern Mediterranean Gas Company pipeline, which was originally constructed to ship gas from Egypt to Israel.

The original export deal was highly controversial due to Israeli involvement, and because Egypt for years sold gas to Israel at cut-rate prices. The export agreement was canceled in 2012, after a string of bombings disrupted the pipeline’s flow and a series of court cases were filed against the businessmen and officials involved in the Israel-Egypt deal.

In 2012, former Petroleum Minister Sameh Fahmy, Mubarak associate Hussein Salem and other officials were sentenced to 15 years on corruption charges relating to the Israel gas deal. The conviction was overturned last month, although charges against Salem, who was tried in absentia, have reportedly not been cleared.

The plan to reverse the flow of the pipeline and export gas from Israel to Egypt was announced after the signing of a Memorandum of Understanding in October. At the time, the companies involved said the deal was subject to regulatory approval on both sides of the border, as well as agreement from pipeline owners EMG.

On February 25, Egypt’s Petroleum Ministry released a statement saying it plans to allow any party within Egypt to import gas from anywhere in the world, providing it does not affect Egypt’s national security. The ministry also indicated it plans to allow gas importers to use the gas for their own purposes, or to re-sell it to other companies.

Little information is available about Dolphinus Holdings, the Egyptian party to the import agreement. According to an October statement from Delek Group, Dolphinus is “a consortium of major Egyptian non-governmental industrial and commercial gas consumers, gas distributors and entrepreneurs, headed by Dr. Alla Arfe.”

A company with the same name appears as a shareholder in an investment company registered in Luxembourg. According to Luxembourg’s registry, Dolphinus Holdings Limited is registered in the British Virgin Islands, a popular jurisdiction for offshore companies, and one that does not require companies to publicly list information about its ownership, management or financial affairs.