Israel's Tamar group to sell gas to Egypt via pipeline

A group of private customers in Egypt has agreed to buy at least $1.2 billion of natural gas from Israel's offshore Tamar field via an old pipeline built to send gas to Israel.

The Tamar partners said on Wednesday they signed a seven-year deal with Dolphinus Holdings, a firm that represents non-governmental, industrial and commercial consumers in Egypt, that calls for a minimum 5 billion cubic meters (bcm) of gas to be sold in the first three years.

An energy source in Israel, however, said the total export amount in the deal could be more than three times higher, depending on demand in Egypt, which is facing one of its worst energy crunches in years.

The supplies will pass through an underwater pipeline constructed nearly a decade ago by East Mediterranean Gas (EMG), the company that oversaw a now-defunct Egyptian-Israeli natural gas deal.