Egypt is a strategic partner to the United States, said the US ambassador to Egypt Jonathan Cohen, commenting on the newly announced commitment to provide $430m in insurance to advance energy security in Egypt by rehabilitating a natural gas pipeline and transporting natural gas from fields offshore in Israel.
“We are excited to support this critical investment in the country by an American company which will not only spur job creation and economic growth but also help provide reliable and affordable energy for the people of Egypt and others throughout the region,” the ambassador added on a Sunday statement.
Adam Boehler, CEO of the US International Development Finance Corporation (DFC), announced the new deal during a signing ceremony at the Africa Investment Forum that included Boehler, Egyptian Prime Minister Mostafa Madbouly, and Minister of Investment and International Cooperation Sahar Nasr.
The insurance will enable Noble Energy – a US-based natural gas exploration and production giant – to restore the 90-km EMG pipeline running from the coastal city of Ashkelon, Israel and under the Mediterranean Sea to its destination in Al-Arish, Egypt.
It will also support the transport of 3trn cubic feet of natural gas over 15 years. The insurance contracts were signed this week after Noble Energy and its partners achieved financial closer for the project.
“Strengthening energy security which bolsters trade, supports investment, and improves quality of life is critical to ensuring lasting prosperity and stability in Egypt,” said Boehler.
“This project will help the country meet growing demand for reliable, low-cost energy in order to fuel sustained economic growth and create opportunities that have a stabilising impact in Egypt and across the region,” he added.
“Egypt welcomes this massive private sector investment and looks forward to the economic impact it will have for the Egyptian people,” said Nasr.
“The Dolphinus gas sales contracts and the EMG acquisition underpin delivery of natural gas from the Tamar and Leviathan fields in Israel into Egypt and represents a major milestone toward Egypt’s goal of becoming a regional energy hub. Both these transactions and the support from the U.S. Government will provide further confidence in the long-term export market and growing cash flow from these premier assets,” said J. Keith Elliott, Noble Energy’s Senior Vice President, Eastern Mediterranean region.
Under the terms of the project, the gas will be purchased by Dolphinus Holdings, a gas trading company.
The project will advance energy security in Egypt and support the country’s efforts to grow its economy by exporting gas to parts of Europe and other global markets. The pipeline being restored had initially been used to transport natural gas from Egypt to Israel but ceased operations in 2012.
Boehler is attending the Investment for Africa Forum during a trip to Egypt to highlight US commitment to the region, explore private sector investment opportunities, and strengthen relationships with key regional partners in support of mutual development goals.
These transactions were originally approved by the Overseas Private Investment Corporation’s (OPIC) Board of Directors in December 2018. DFC is a new US Government agency that combines and modernises OPIC and USAID’s Development Credit Authority (DCA).
With a more than doubled investment cap of $60bn and new financial tools, DFC is equipped to more effectively mobilise private sector capital to urgent development challenges and advance US foreign policy. The agency continues to work with US Congress to fund DFC through the appropriations process in order to exercise its new investment and development tools.