Egypt Resumes Gas Exports To Jordan And Israel
Egypt resumed the export of natural gas to Jordan and Israel last week following the interruption of supplies on 5 February as a result of a gas leak and explosion at a metering station in al-'Arish in Egypt’s North Sinai (MEES, 14 February). Jordanian Minister of State for Media Affairs and Communications and Government spokesman Tahir 'Udwan confirmed that Egyptian gas had reached the East 'Amman and al-Samra power plants on 15 March. Mr 'Udwan said that Jordan was initially receiving 70mn cfd (1.98mn cmd) and that this was expected to rise to 200mn cfd (5.66mn cmd) by Saturday 19 March. Supplies resumed briefly on 14 March but were halted due to the discovery of a leak, which was subsequently repaired. Reports from 'Amman at the end of last week indicated that Jordan’s Minister of Energy and Mineral Resources Khalid Tuqan was planning to visit Cairo soon to meet with Egypt’s new Minister of Petroleum 'Abd Allah Ghurab and discuss the possibility of raising supplies to Jordan, which depends on Egyptian gas to generate 80% of its electricity needs. The minister estimated that as a result of the interruption of the gas supply Jordan lost $4.2mn daily. Jordan was receiving the gas under a deal signed in 2004 with Egypt for the delivery of 2.4 bcm/year of gas at a preferential price via the Arab Gas Pipeline (AGP). But recent reports suggest that Egypt is looking to raise the gas price to Egypt.
An Israeli partner in the Egyptian-Israeli East Mediterranean Gas (EMG) consortium confirmed on 16 March that the gas flow to Israel had resumed, but that the initial volumes supplied to EMG were less than the contractual quantities, and that they would ramp up daily to the full contractual quantities. Israel requires about 4.5-5 bcm/y of gas for power generation and relies on EMG for about 45% its supplies. Israel has a 15-year contract with EMG to purchase 1.7 bcm/y of gas. In addition last December five subsidiaries of Israel Corporation signed a 20-year purchase agreement with EMG for 1.4 bcm/y, with an option for a further 1.5 bcm/y (MEES, 20 December 2010). Israeli customers are reportedly paying $4-4.50/mn BTU, almost half the current market price, a discrepancy that Egypt would certainly like to correct. Gas to Israel is supplied via the 100km al-'Arish-Ashkelon pipeline, while AGP delivers gas to Jordan, Syria and Lebanon. At MEES press time there was no confirmation that the gas had actually reached Syria.
Copyright MEES 2011.
