Friday, April 23, 2021

$15 Billion Israel-Egypt Deal Signed; The Biggest for Israel’s Natural Gas Industry

The Israel-Egypt Deal on natural gas is estimated at a whopping $15 Billion. This is the biggest Israel-Egypt Deal and the biggest export deal for the Natural Gas Industry in Israel. PM Netanyahu has welcomed this ‘Historic’ Israel-Egypt deal with open arms.

PM Netanyahu, commenting on the deal, said that the deal will bring in billions to the ‘country’s coffers’. He also commented on how the deal will work towards strengthening the security, economy and regional ties for Israel. The Chief of Operations at Delek Drilling, the Israeli company that has signed the Israel-Egypt deal, stated that this would enhance the position of Egypt as a centre of regional energy.

Also Read: Why are Middle East Allies of US “Turkey and Egypt” Bonding with Russia?

Israel-Egypt Deal to Bring Enormous Tax Revenue

Israel is slated to receive billions of money in tax revenue, annually, from Egypt through this Israel-Egypt deal. The $15 billion deal will bring in approximately 50% of the revenues for the government of Israel. These numbers have been shared by a consultant from the private energy sector and a chief economist. Soon after the activation of one of the pipelines, Israel should start receiving around $1-1.5 billion, annually. The state will be in a position to impose a royalty of about 12.5% on the revenue and income tax will receive about 23 percent on the total profits. The excess revenue tax will range anywhere between 22 to 24 percent.

A part of the excess revenue tax will go to the sovereign wealth fund of Israel. The deal also includes the supply of natural gas to Jordan, as per the original agreement that was signed in 2016. This Israel-Egypt deal will help strengthen ties between the two nations on several levels.

Also Read: India, Pakistan Bury Hatchet and Work on TAPI Pipeline?

The Final Details of the Israel-Egypt Deal Yet to be Announced

Although the Israel-Egypt deal has been finalised other details like the route of the natural gas from Israel’s Tamar and Leviathan fields to Egypt are yet to be announced. According to Delek, there are many possible routes, the EMG pipeline being one.

After Israel discovered the two ‘healthy’ gas fields- Tamar and Leviathan fields, it has been working its way to become an exporter. It was in 2016 that the Israel-Egypt deal was formulated between Jordan and Israel, for 15 years.

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