EU Sign Trilateral Gas Deal with Israel and Egypt

The EU Commission has signed a trilateral memorandum of understanding on the supply of Israeli gas to Europe via Egypt’s LNG infrastructure.

• There is no infrastructure allowing Israeli gas to flow to Europe meaning it has to come via Egyptian regasification on LNG vessels.
• "With this EU-Israel-Egypt agreement we will work on the stable delivery of gas to the EU from the East Mediterranean region," EC President Ursula von der Leyen said on Twitter June 15. "This will contribute to our European energy security," she said.
• The deal has come as the EU looks for alternatives to Russian pipeline flows.
• Egypt has two LNG export facilities -- the 7.2 million mt/year (9.9 Bcm/year) Shell-operated Idku facility and the smaller Eni-operated 5 million mt/year Damietta plant.
• European gas prices trade at a premium to Asian LNG prices making the region more favourable for Egyptian LNG exports. Turkey has taken 15 LNG cargoes from Egypt so far in 2022, followed by eight into Spain, six to France, and two each to Greece, the Netherlands and the UK.
• The infrastructure of the agreement is meant to be suitable for being used with renewables in the future according to von der Leyen.