Israel set to approve 'largest' gas supply deal in its history to Egypt

The Israeli government is set to finalise a major gas supply agreement with Egypt, involving the export of 22% of resources from Leviathan, Israel's largest gas field, and 13% of the country's total natural gas to Cairo over several years.

The deal comes after two years of delays and is expected to be signed in the next two weeks.

New Energy, a partner in the Leviathan field, described the agreement as the "largest" in the history of the Hebrew state, noting that it will triple Israeli exports by 2028.

The company announced that Egypt will buy 130 billion cubic metres of Israeli gas until 2040, worth up to $35 billion (€30bn).

The project is an amendment to the 2019 agreement signed by Israeli Prime Minister Benjamin Netanyahu and Egyptian President Abdel Fattah el-Sisi, which stipulated the export of only around 60 billion cubic metres by the early 2020s.

The project allows Israel to increase natural gas production and export it to Asian and European markets, while at the same time guaranteeing Egypt a stable supply for its power plants and supporting the country's liquefied natural gas (LNG) sector.

Stages of the deal and quantities of gas

NewMed Energy (formerly known as Delek Drilling) confirmed that the deal will take place in phases, with Cairo first buying the gas through Egyptian importers Blue Ocean Energy, with 20 billion cubic metres starting in the first half of 2026, and an additional 110 billion cubic metres after the expansion of Leviathan's production is completed, according to the Hebrew newspaper Globes.

The company described the deal as pivotal, as it will allow the field's production capacity to expand from 21 billion cubic metres to 23 billion cubic metres per year, strengthening Leviathan's position as one of the most important gas sources in the region.

Export plan for Israel's domestic economy

By 2035, Israel will export 60% of the gas produced in the field, while 40% will be allocated to the domestic market to meet the needs of new power plants.

In 2024, the field produced about 11 billion cubic metres of gas, 50% of which was exported to Egypt, while the rest was distributed between Israel's domestic economy and Jordan.

In terms of gas supply to the Israeli economy, NewMed Energy confirmed that the expansion will ensure that from the 2040s, Leviathan will be Israel's main source of gas, providing the bulk of the country's natural gas consumption until the end of the field's life.