Noble Energy has struck a £462million deal to provide gas from the giant Leviathan field off Israel to Jordan.
The deal, Israel’s second gas export arrangement, will see supplies being piped to Jordanian firm Arab Potash from 2016.
The Arab state is looking to secure its energy supply after repeated disruptions to imports of Egyptian fuel following pipeline bombings in Sinai.
The 2010 discovery of the offshore Leviathan field, coming after the nearby Tamar find, proved a bonanza for Israel, which expects the gas to meet its needs for a quarter of a century, while also enabling exports.
Noble will build a pipeline south of the Dead Sea to supply Arab Potash with 2billion cubic meters of gas for 15 years at “preferential prices,” the Amman-based company said in a statement.
Jordan is one of two Arab countries that have signed a peace agreement with Israel. Israel’s Delek Group Ltd., via its units Delek Drilling LP and Avner Oil Exploration LLP, is a partner in the Tamar field together, along with Isramco Negev.
Israel, which itself imported gas from Egypt gas until bombings cut deliveries, reached its first export agreement in January – a 20-year deal to supply a planned Palestinian power station. The Leviathan partners expect to make more than £720mllion to send gas to the plant.
The new deal will cut production costs for Arab Potash and help protect more than 2000 jobs in the country, said chairman Jamal Al Sarayreh.
The mineral producer’s shift from using heavy fuel to less expensive gas is projected to save the firm around £200million. The kingdom, which imports almost all of its energy needs, is the Middle East’s smallest economy after Bahrain.