Israeli gas fields reopen as Egypt restarts supplying factories

Both of Israel’s natural gas fields that supply Egypt and Jordan have restarted operations following their closure on June 13th after Israel attacked Iran, according to The Arab Weekly plus agencies on June 26th.

The Egyptian Prime Minister Mostafa Madbouly announced the resumption of gas supplies to factories will commence from June 27th after Israel ended exports because of the Israel-Iran conflict.

The bulk of gas exports to both Egypt and Jordan come from two of Israel’s three gas fields, Chevron-run Leviathan and Energean-operated Karish, both of which are located off Israel’s Mediterranean coast.

Following their closure on June 13th, only the older Tamar natural gas field remained operational, which is predominantly used for domestic provisions.

An initial estimate placed the loss in revenue from Leviathan’s closure at $12 million, a regulatory filing in Tel Aviv from Chevron’s partners in Leviathan, NewMed and Ratio Energies, stated.

They stated their intention to examine the possibility of receiving compensation from the state due to the end of production and the subsequent revenue loss.

Energean and NewMed revealed that both of the fields have reinitiated operations following the ceasefire agreement between Israel and Iran on June 24th. They added that the restart process takes many hours.

Israel’s energy ministry confirmed their reopening of the gas fields, following the completion of a security evaluation, leading to the restart of gas exports, an increase in state tax revenues and heightened flexibility in dealing with the electricity and industrial sectors.

According to data from the Joint Organisations Data Initiative, Israel’s gas composes roughly 15 to 20% of Egypt’s gas usage. Egyptian fertiliser producers were forced to stop operations due to the disruption to Israel’s supply.

Madbouly declared that pumping gas to factories will restart on June 27th, a cabinet statement said.

Leviathan makes 12 billion cubic metres of gas annually for sale to Egypt, Jordan, and Israel, which is set to increase to approximately 14 bcm next year.

Two Egyptian sources told Reuters that imports from Israel would increase gradually, with operations likely to be restored to full capacity by June 28th.

The majority of the imports come in the form of liquified natural gas, which then need to undergo the process of regasification in Egypt. However, although Egypt has three floating storage and regasification units (FSRUs) to execute that process, just one is currently operational.

The sources revealed that the Energos Eskimo FSRU is due to become operational in time. The unit will be transferred to the Sumed terminal, the site at which it will be connected to the national gas grid.

One source stated that “it could take around 11 to 23 days for the unit to become fully operational, although the ministry of petroleum could try to compress the time needed.”

The Arab Weekly plus agencies, Reuters