Egyptian National Bank lends "East Mediterranean Gas" $300 million to receive Israeli gas

SadaNews - The "Egyptian National Bank", the largest state-owned bank, intends to lend the company "East Mediterranean Gas" $300 million to finance the construction of a new pipeline in Sinai for transporting additional quantities of Israeli gas to Egypt, according to three informed sources who requested anonymity.

One of the sources explained that the bank will solely finance the deal, without the participation of other banking institutions. The loan will be disbursed simultaneously with the commencement of the implementation of the pipeline within Egyptian territories, expected before the end of this year.

This step follows an agreement reached last August between Egypt and the "New Med Energy" company, one of the partners in the Israeli Leviathan field, to amend the natural gas export agreement, adding about 4.6 trillion cubic feet (130 billion cubic meters) of gas over the lifetime of the agreement, which extends until 2040, to be implemented in two phases. The first phase includes the export of 706 billion cubic feet (20 billion cubic meters) immediately upon the amendment coming into effect.

The second phase stipulates exporting up to 3.9 trillion cubic feet (110 billion cubic meters), but it is conditional on meeting investment requirements and expanding the infrastructure for gas transportation.

The deal is considered the largest of its kind between the two countries in the energy sector and is part of Cairo's efforts to enhance its natural gas supplies amid declining local production and rising domestic demand.

According to one of the officials who spoke to "Al-Sharq", the pipeline aims to accommodate the additional quantities. Another source suggested that the "Gasco" company, affiliated with the Ministry of Petroleum, will implement the project upon completion of the technical details.

A shift in priorities

Egypt is seeking to bolster its position as a regional hub for gas trading and liquefaction by importing gas from neighboring countries, liquefying it at its facilities on the Mediterranean Sea, and then re-exporting it. However, the plan faced challenges in 2024, following an widening gap between production and consumption.

Egypt's current gas production stands at 4.21 billion cubic feet per day, compared to the 6.6 billion it aimed for. Cairo hopes to resume exporting the surplus by 2027, with expectations of an uptick in production thereafter.