“Israel”, Egypt sign record $35 billion gas deal

Partners in “Israel's” Leviathan offshore natural gas field have signed a $35 billion agreement to increase gas exports to Egypt.

The deal, which is the largest export agreement in “Israel's” history, will see approximately 130 billion cubic meters (bcm) of natural gas supplied to Egypt through 2040.

This transaction comes at a time when diplomatic relations between Cairo and Tel Aviv are at their lowest point in years due to the ongoing Gaza aggression.

Yossi Abu, CEO of NewMed Energy, which holds 45.34% of the Leviathan reservoir, said the deal will fund the necessary infrastructure expansion to ensure a stable domestic gas supply until at least 2064.

The deal is also expected to generate hundreds of millions of shekels in state revenue from royalties and taxes.

Egypt’s domestic gas production has been in sharp decline, falling from a peak of 71 bcm in 2021 to just 45 bcm in 2024, largely due to reduced output from its primary Zohr field.

This energy deficit has led to expensive liquefied natural gas (LNG) imports and planned rolling blackouts that have sparked public anger in the country.

The new agreement, signed with Egypt’s Blue Ocean Energy (BOE), is set to eventually triple the amount of gas “Israel” exports to its neighbor annually.

The implementation of the deal is a phased process that is contingent on significant infrastructure projects, including a third pipeline to the Leviathan platform and new transmission pipelines to Egypt.

The first phase, involving 20 bcm of gas, is expected to begin in the first half of 2026, while the second phase, for the remaining 110 bcm, will follow the completion of the broader Leviathan expansion project.

Legal experts argue that a pipeline central to the deal, which runs through Palestinian maritime zones, breaches international law because it was constructed without the consent or compensation of the Palestinian Authority.

Furthermore, the Leviathan field, operated by a consortium including NewMed Energy, Chevron, and Ratio Energies, has been identified as a "carbon bomb" with the potential to emit 1.06 billion tons of carbon dioxide over its lifetime.

The operator has also faced scrutiny for attempting to halt air quality monitoring near its platform, a move reversed only after public and environmental pressure .