FINANCIAL TIMES
by John Reed
September 3, 2014

Israel is to supply up to $15bn of natural gas from its Leviathan field over 15 years to Jordan, easing an energy crunch in the kingdom and marking the biggest such bilateral deal its nascent offshore industry has yet seen. Noble Energy of the US and Israel’s Delek, the two main investors in Leviathan, announced the deal in stock exchange filings on Wednesday in which they said they would supply 1.6tn cubic feet over 15 years via a new pipeline. The investors said they would deliver the gas at a border location between Israel and Jordan once pipeline infrastructure was complete. Jordan’s National Electric Power Company will be the buyer of the gas.

The Israeli companies did not put a price tag on the deal, but a person familiar with its terms estimated the contract’s value at $14bn to $15bn. Noble and Delek will build the section of the pipeline leading to the Jordanian border, and Jordan will build on the other side. The agreement followed long negotiations fraught with political sensitivities. Israel and Jordan signed a peace treaty in 1994 and co-operate closely on security matters, but there is widespread public animosity toward Israel in Jordan because of its occupation of Palestinian lands.

The parties involved in the deal said they were working in co-ordination with, and with the support of, the US state department.

Jordan’s economy is still reeling from the loss of cheap Egyptian natural gas since 2011, when political unrest and sabotage of the pipeline running through the Sinai peninsula caused the resource to run dry, compounding pressure on its economy caused by the war in Syria and broader chaos in the Middle East……..

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