Energean, a UK-based company, signs a 15-year contract for the transmission of Israeli gas

Energean, a British gas producer, announced on Friday that it had signed 15-year contracts for the planned Nitzana gas pipeline from Israel to Egypt. The agreement was part of a $4 billion contract with Israel.

Energean reported that the deal with Israel Natural Gas Lines, a state-owned pipeline operator, covers a transmission of up 1 billion cubic meters of natural gas each year. There are options to extend and terminate early.

Energean stated that the Nitzana Pipeline will run from Ramat Hovav, in southern Israel, to the Egyptian border, near Nitzana. It is expected to become operational within three to four years, depending on transmission agreements between all parties.

The pipeline will ease Egypt's energy crisis. Egypt has spent billions on the import of liquefied gas. It is also part of an effort to increase Israeli gas exports into the Arab World's largest nation.

Expected to Transport

Israel exports to Egypt more than 2.2 billion cubic foot of natural gas each day.

Energean Israel said it would fund 16.4% or approximately $100 million of the costs associated with the construction of the pipelines and compression stations.

The company has also signed a term sheet that is non-binding with a client in the East Mediterranean for future gas purchases. Ankita Boora reported from Bengaluru, and Stephanie Kelly from London. Mrigank Dahniwala edited the story.

(source: Reuters)