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Delek says pipeline checks done, gas exports to Egypt by year end

Israel’s Delek Drilling said it has completed testing of a subsea natural gas pipeline to Egypt, but it did not begin commercial sales by the end of June as it had initially hoped.

JERUSALEM, July 2 (Reuters) - Israel’s Delek Drilling DEDRp.TA said it has completed testing of a subsea natural gas pipeline to Egypt, but it did not begin commercial sales by the end of June as it had initially hoped.

Delek Drilling and its partner Noble Energy NBL.N signed a landmark deal early last year to export $15 billion in natural gas from Israeli offshore fields Tamar and Leviathan to a customer in Egypt.

Israeli officials called it the most significant deal to emerge since the neighbors made peace in 1979.

Delek Drilling Deputy CEO Yossi Gvura told Reuters in early June that they hoped to start selling small quantities of gas to Egypt by the end of the month, but the company said on Tuesday exports had not yet begun.

Due to the forecast demand for gas in Israel over the summer, the company expects commercial sales to Egypt to begin only when the Leviathan field comes online by the end of 2019.

Delek and Noble have agreed to buy into the EMG gas pipeline between Ashkelon in Israel and El-Arish in Egypt to transport the gas supplies. Now that the technical examination of the pipeline is complete, Delek expects to close the EMG deal by Aug. 31.

(Reporting by Ari Rabinovitch; Editing by Tova Cohen)

((ari.rabinovitch@thomsonreuters.com; +972-2-632-2202; Reuters Messaging: ari.rabinovitch@thomsonreuters.com@reuters.net))

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