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Israel firm announces $1.2 bn gas deal with Egyptian company

Egyptian officials claim they know nothing of the deal between Israeli, US suppliers and Egyptian holding company
A 2011 attack on the same pipeline in Sinai through which the Israeli gas would flow (AFP)

An Israeli partner in the Tamar gas field announced Wednesday a deal to sell natural gas to an Egyptian company, as Cairo said it knew nothing of the deal, which it must approve.

The Israeli company, Delek Drilling, said the partners would supply Dolphinus Holdings with at least five billion cubic metres of gas over three years in a deal estimated at an overall $1.2 bn.

In Cairo, an oil ministry official said "we did not receive any official request regarding this deal; we don't have any official information." 

He added that the "government must approve any deal, and this deal must provide an added value for Egypt."

The gas would be transported, in a reversal of direction, through the same pipeline Cairo once used to export gas to Israel and Jordan as part of a corrupt deal involving former Egyptian and Israeli intelligence officials-turned-businessmen that saw Israel buying Egypt's gas prices significantly below market, MEE has previously reported.

The deal, which the former head of the Egyptian parliament's Energy and Industry Committee said was "the most corrupt deal ever in the history of Egypt and in the history of the oil world", became a major bone of contention on the Egyptian street ahead of the 2011 uprisings and are thought to have contributed to president Hosni Mubarak's overthrow.

The announcement of the agreement involving the Tamar field comes as the Israeli and US companies partnered in that field face challenges to sell the gas from Israel's much larger offshore Leviathan field. 

Israel's Antitrust Authority - an independent commission - announced in late December, following protests in Israel over the past year or so from activists against what they see as the profiteering of 'gas barons', that it might designate Houston-based Noble Energy and Delek’s ownership of Levithan as a cartel and petition their ownership to be reorganised.

The Authority's final decision is expected in coming weeks, once a new government is formed following this week's Israeli elections. 

However, the announcement has already been cited as the main reason a Palestinian power company pulled out of a 20-year gas supplying deal with Noble and Delek last week.

Soon after the decision, Jordanian officials also told reporters that were weary to move forward with a 15-year deal to supply their country with Israeli gas without clarity around the Antitrust decision.

Public pressure among the Palestinian and Jordanian publics has also been mounting in recent months over the potential deals.

"The gas of the enemy is occupation," Jordanian protesters chanted at a demonstration in Amman earlier this month. “Our people will not fund wars on Gaza!”