Spain's Union Fenosa Gas is considering dropping a lawsuit against Egypt, if it approves a deal for the Spanish company to import Israeli gas from the Tamar field at its liquefied natural gas (LNG) export plant in Damietta, Egypt, a source close to the talks told "Reuters."
Union Fenosa was compelled to suspend exports from its plant at Damietta in 2012 when gas shortages led the Egyptian government to channel supplies to its growing domestic needs. Consequently, Union Fenosa filed a multi-billion dollar lawsuit against Egypt in 2013 in the International Chamber of Commerce for breach of contract, and began talks for gas from Tamar. Egypt owes around $5.9 billion to foreign oil and gas firms operating in the country, "Reuters" estimates.
Three-way talks with the Tamar partners and Egypt on securing a 2.5 trillion cubic feet gas import deal over 15 years are progressing, the source told "Reuters", but technical, commercial and legal issues still have to be ironed out, he added.
BG Group, which owns Egypt's other LNG export plant at Idku, is in talks to import gas from Israel's giant Leviathan offshore field in order to revive exports from its own plant which have declined sharply.
Noble Energy Inc. (NYSE: NBL) holds a 36% stake in Tamar, Isramco Ltd. (Nasdaq: ISRL; TASE: ISRA.L) (28,75%), Delek Group Ltd. (TASE: DLEKG) units Delek Drilling Limited Partnership (TASE: DEDR.L) and Avner Oil and Gas LP (TASE: AVNR.L) (each hold 15.625%) and Alon Natural Gas Exploration Ltd. (TASE: ALGS) holds 4%.
Published by Globes [online], Israel business news - www.globes-online.com - on September 17, 2014
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