Negotiations are ongoing between the two companies that operate the Israeli gas field Tamar along with the Spanish Union Fenosa Gas SA (UFG) to drop an Israeli arbitration court case against Egypt, US business agency Bloomberg revealed on Tuesday.
Quoting an anonymous source, Bloomberg explained that the two companies that run Israel’s Tamar natural gas field –Noble Energy Inc. and Delek Group Ltd – are discussing the sale of six billion cubic metres of gas per year to the Spanish company which will then be piped to the Liquid Natural Gas plant (LNG) in the Egyptian city of Damietta “one year after the signing” of the agreement.
UFG owns 80 per cent of the liquefied natural gas plant in Damietta, while Egyptian state-owned companies hold the remaining 20 per cent.
“As part of the deal being discussed, UFG will drop its outstanding arbitration case against Egypt,” Bloomberg reported, citing “a person familiar with the matter” who asked for anonymity.
UFG, a joint venture between Spain’s Gas Natural SDG and Italy’s Eni SpA, had filed for arbitration at the International Chamber of Commerce in Paris against Egypt’s state-owned EGAS in 2013 over the latter’s failure to live up to its commitment to supply feedgas to the former. Feedgas is the raw natural gas material used in producing LNG. UFG filed the arbitration case when it was no longer able to produce LNG due to Egypt’s failure to supply gas as previously agreed.