Israel approves $35bn gas export deal with Egypt

Israeli Prime Minister Benjamin Netanyahu announced approval of a $35bn ($34.7bn) natural gas export agreement with Egypt, describing it as the largest gas deal in Israel's history, Israeli media i24 reported on December 17.

Netanyahu said the agreement, worth ILS112bn, will see ILS58bn ($17.9bn) go directly to the state treasury and could pontentially ease tensions between the two neighbours following the cessation of fighting in Gaza with Hamas.

The deal involves large-scale development of gas infrastructure with participation from American company Chevron and Israeli businesses.

Gas supplies to Egypt will come from Israel's Leviathan field in the Mediterranean Sea, with reserves officially estimated at 600bn cubic metres.

Israeli authorities describe the reserves as "a strategic asset capable of changing the region's energy balance". The agreement between Israel and Egypt was announced in August but approval stalled due to Israel's position.

Energy Minister Eli Cohen blocked progress, citing lack of clear guarantees that Israel would receive "fair prices".

An unnamed Israeli official told CNN the Netanyahu government deliberately delayed the process for unclear reasons.

Decisive pressure came from the US presidential administration, which lobbies interests of project participant Chevron.

After Cohen's statements, US Energy Secretary Chris Wright demonstratively reduced contacts with him and cancelled a visit to Israel on October 31.

Egypt has imported gas from Israel for a long time, with Egyptian Oil and Natural Resources Minister Tarek El Molla stating on March 1 that there were no problems receiving gas from Israel.

Relations between Israel and Egypt deteriorated noticeably after the start of the war in Gaza, despite Egypt being one of few Arab countries maintaining diplomatic relations with Israel.

Cairo increased military presence on the Sinai Peninsula, fearing thousands of Palestinian refugees fleeing Israeli strikes might flood Egyptian territory.

The Trump administration believes the gas agreement, expanding energy supplies to North Africa, will bring Israel and Egypt closer together.

"This is a huge opportunity for Israel. Selling gas to Egypt will create interdependence, bring countries closer together, ensure more reliable peace and prevent war," an American source told Axios.

The White House has notified Netanyahu's government it will attempt to help organise a summit with Egyptian President Abdel Fattah el-Sisi immediately after concluding the deal.

"I approved this deal after our security interests and other vital interests were secured. This deal significantly strengthens Israel's status as a regional energy power and promotes stability in our region," Netanyahu said.