Israel reaches $35bn gas export deal with Egypt

Israel's Leviathan gas field partners and the Ministry of Energy reached a final agreement to export 130bn cubic metres of gas to Egypt for $35bn, Globes reported on December 8.

The partners - NewMed Energy (45.33%) led by Yossi Abu, Chevron (39.66%) and Ratio Energies (15%) - committed to provide guaranteed pricing to Israel's domestic market.

The Leviathan partnership also pledged to prioritise Israel's domestic market if technical problems arise at the Karish-Tanin or Tamar fields.

Israeli Prime Minister Netanyahu is rushing approval ahead of his meeting with US President Donald Trump on December 29 as US funding is expected via the Chevron investment.

Once Israel's government grants final approval, the partners are expected to convene within two weeks for an investment decision to expand Leviathan infrastructure.

Qatar attempted to exploit delays by trying to convince Cairo to purchase liquefied natural gas instead. The process began in August with the $35bn agreement between the partners and Egypt, expected to finance expanded production from Leviathan and construction of a new export pipeline to Egypt via Nitzana.

Egyptian President Abdel Fattah Al-Sisi resisted turning to Qatar because Emir Tamim Al-Thani is a senior Muslim Brotherhood figure.

Cairo recently signed a roughly $4bn LNG agreement with US-based Hartree Partners, though this does not approach the 130 BCM from Leviathan, representing approximately 22% of the reservoir.

Senior American officials, led by Trump, have been involved for months, Globes reported. US Ambassador to Jerusalem Mike Huckabee and Energy Secretary Chris Wright are involved.

Wright cancelled his planned visit to Israel for the signing ceremony roughly a month ago due to Israel's refusal to approve the deal.

One issue Washington officials addressed was ensuring Chevron remains committed.

The company holds assets in the US, Kazakhstan and Australia, with voices suggesting the intended investment might be redirected elsewhere.

Egyptian production peaked at 71 BCM annually in 2021 but technical problems caused output to plunge at an average annual rate of 14% to just 45 BCM in 2024, whilst Egyptian annual consumption stands at approximately 70 BCM.

The Ministry of Energy said negotiations are at an advanced stage, but there are still issues to finalise, with no signing date set.