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Dolphinus Gas Supply Agreement Summary

Core Content

The Dolphinus Gas Supply Agreement involves the supply of natural gas by Noble Energy Mediterranean Limited (NEML) and Delek Drilling, LP (Delek) to Dolphinus Holdings Limited, a privately owned Egyptian gas trading company. The gas is sourced from the Tamar and Leviathan Fields offshore Israel, under two 10-year Gas Sale and Purchase Agreements (GSPAs). Together, these agreements facilitate the sale of up to 64 billion cubic meters (bcm) of natural gas to Egypt, aiming to address domestic shortages and support the country's strategic goals in the energy sector.

Key Information

• Host Country: Egypt
• Investor: Noble Energy Mediterranean Limited (“NEML”)
• Project Description: Supply of natural gas from the Tamar and Leviathan Fields to Dolphinus via two GSPAs.
• Investment Type: Gas Supply Contract
• Investment Amount: NEML’s investment is its share of the value of the GSPAs.
• Proposed Insurance Amount: $250,000,000
• GSPA Counterparty: Dolphinus Holdings Limited
• Private Insurer Participation: Private insurers will participate alongside OPIC (Overseas Private Investment Corporation).

Main Views

The project is viewed as having positive developmental effects for Egypt, as it seeks to enhance the country's gas supply and reduce its reliance on expensive LNG imports. It is expected to contribute to Egypt's goal of becoming a regional gas transportation, processing, and production hub, leveraging existing infrastructure to access global markets.

From an economic standpoint, the project is not expected to have a negative impact on the U.S. economy, as there is no U.S. procurement involved. It is projected to have a neutral effect on U.S. employment and a neutral five-year trade balance impact.

Environmental and Social Considerations

• Environmental Categorization: The project has been classified as Category C under OPIC's environmental and social screening framework. This classification is due to the minimal environmental and social impacts associated with the insurance of gas sales, which do not involve construction or operations.
• Applicable Standards: The project will be managed in accordance with the IFC 2012 Performance Standards, specifically:
  • PS 1: Assessment and Management of Environmental and Social Risks and Impacts
  • PS 2: Labor and Working Conditions
• Non-Triggered Standards: At this time, the following standards are not applicable due to the nature of the project:
  • PS 3: Resource Efficiency and Pollution Prevention
  • PS 4: Community Health, Safety, and Security
  • PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
• Environmental and Social Management System: The project company has implemented a comprehensive system to ensure compliance with the IFC standards.

Social Assessment

• The project will operate in compliance with OPIC’s Environmental and Social Policy Statement and applicable local laws.
• Social and labor management systems are in place, including:
  • Human resources policies
  • Information dissemination mechanisms
  • Security protocols
• These systems are designed to manage risks and ensure fair treatment of workers, including provisions on:
  • Non-discrimination
  • Working hours
  • Timely wage payments
  • Hazardous working conditions

Conclusion

The Dolphinus Gas Supply Agreement represents a strategic investment to support Egypt's energy security and its ambitions to become a regional gas hub. While the project itself does not involve direct construction or operational activities, it is supported by a robust environmental and social management framework to ensure responsible conduct. The involvement of both private insurers and OPIC underscores the project's importance and the confidence in its viability.