Israel's Delek Drilling seeks shareholder approval for Egypt pipeline investment

12 Jun 2018

Shareholders in Israel’s Delek Drilling will vote next month on whether to approve a $200 million investment that will allow the company to export gas to Egypt via a subsea pipeline.

Delek announced on Monday that it would hold a special shareholders’ meeting on July 1 to decide whether to go ahead with the investment in East Mediterranean Gas (EMG), which operates a pipeline to carry gas between Israel and Egypt’s Sinai Peninsula.

Delek and Texas-based Noble Energy are partners in the large Tamar and Leviathan natural gas fields off Israel’s coast and signed deals in February with Egyptian firm Dolphinus Holdings to sell $15 billion of gas.

Delek and Noble have been negotiating to buy the rights to use EMG’s pipeline, which was built years ago as part of a now-defunct Egyptian-Israeli natural gas deal but has been out of use.

Egypt used to sell gas to Israel under a 20-year agreement, which collapsed in 2012 after months of attacks on the pipeline by militants in Egypt’s remote Sinai peninsula. It has since been out of commission and EMG is suing the Egyptian government for damages.

Noble and Delek now want to send gas in the other direction.

Delek said in a statement to the Tel Aviv Stock Exchange that its shareholders would meet on July 1 to vote on whether the company could hold off on distributing profits in order to invest in EMG.

It estimated its investment would be about $200 million, but did not provide other financial details. It said 75 percent of shareholders would need to support the deal for it to move forward.

reuters

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