Wedoany.com Report-Oct. 25, British gas producer Energean (ENOG.L) announced on Friday that it had signed a 15-year transmission agreement for Israel’s planned Nitzana pipeline to Egypt, as part of its broader $4 billion portfolio of Israeli gas offtake contracts. The agreement, reached with the state-owned Israel Natural Gas Lines, covers the transmission of up to 1 billion cubic metres of natural gas per year, with provisions allowing for extension or early termination.

London-based Energean’s drill ship begins drilling at the Karish natural gas field offshore Israel in the east Mediterranean May 9, 2022.

According to Energean, the Nitzana pipeline will extend from Ramat Hovav in southern Israel to the Egyptian border near Nitzana. The project is expected to become operational within three years, contingent on the completion of transmission agreements among all participating parties. This infrastructure is designed to facilitate the transport of Israeli gas to Egypt, supporting regional energy cooperation and addressing Egypt’s domestic energy needs.

The planned pipeline is projected to deliver around 600 million cubic feet of natural gas per day. Once in operation, it will increase Israel’s total export capacity to Egypt to more than 2.2 billion cubic feet per day. The project aligns with ongoing efforts to enhance energy connectivity between the two countries and to help stabilize Egypt’s gas supply situation, as the country continues to rely on imported liquefied natural gas to meet demand.

Energean Israel will contribute approximately 16.4% of the total construction costs, equivalent to about $100 million, for the pipeline and the associated compression stations. The company noted that this investment forms part of its broader strategic commitment to expanding natural gas infrastructure in the Eastern Mediterranean region.

In addition to the pipeline deal, Energean announced that it had signed a non-binding term sheet with an East Mediterranean client for potential future gas offtake. This agreement could further strengthen Energean’s regional supply network and support its long-term production and export plans.

Meanwhile, Russian President Vladimir Putin on Thursday commented on the latest round of U.S. sanctions targeting Russia’s two largest oil companies, saying the measures would have limited impact on the country’s energy sector. His remarks came amid continued global attention to energy market developments and international supply dynamics.

Overall, Energean’s new transmission agreement marks a significant step toward expanding Israel’s gas export infrastructure and promoting energy cooperation in the Eastern Mediterranean. The Nitzana pipeline, once completed, is expected to play a key role in meeting regional gas demand while strengthening economic links between Israel and Egypt.