Israeli firm cuts $15B deal with Egypt

JERUSALEM — An Israeli energy company on Monday announced a $15 billion deal to supply natural gas to Egypt, in the largest export agreement to date for Israel’s nascent natural gas industry.

Delek Drilling and its U.S. partner, Noble Energy, signed a deal to sell 64 billion cubic meters of gas over a 10-year period to Egyptian company Dolphinus Holdings.

Yossi Abu, chief executive of Delek Drilling, called the deal “great news” for both countries.

He said he expects most of the gas to be used for Egypt’s domestic market, but predicted it could pave the way for wider cooperation and help turn Egypt into an export hub for Israeli gas.

“The main thing is that Egypt is becoming the real gas hub of the region,” Abu said.

Egypt was the first Arab country to make peace with Israel, in 1979, but past economic agreements have been controversial in Egypt, where support for the Palestinians runs high. There was no comment from Egyptian officials.

The gas will be delivered from Israel’s Tamar gas field, which is already operational, and the larger “Leviathan” field, which is scheduled to go online in late 2019. The gas is expected to begin flowing late next year.

Israel has been developing natural gas fields off its Mediterranean coast for the past decade. In 2016, Delek and Noble signed Israel’s first export agreement, reaching a $10 billion, 15-year deal to provide 45 billion cubic meters of gas to Jordan.

The gas deals reflect Israel’s shared strategic interests with Jordan and Egypt, both of which are important U.S. allies.