Israel's Leviathan natural gas field has signed the largest export agreement in the country's history, worth up to $35 billion to supply gas to Egypt, NewMed , one of the partners in the field, said on Thursday.
The deal should ease an energy crisis in Egypt, which has spent billions of dollars on importing liquefied natural gas since its own supplies fell short of demand.
Egypt's production began declining in 2022, forcing it to abandon its ambitions to become a regional supply hub. It has increasingly turned to Israel to make up the shortfall.
Exports from Leviathan were halted during a 12-day war between Israel and Iran in June for security reasons, but have since resumed.
Under the deal announced on Thursday, Leviathan, off Israel's Mediterranean coast, with reserves of some 600 billion cubic metres, will sell about 130 bcm of gas to Egypt through 2040, or until all of the contract quantities are fulfilled.
The gas is pumped via pipelines, which makes it cheaper than LNG, whose cost is inflated by the process of super-cooling it to make it a liquid that can be transported by ship and then regasifying it when it reaches its destination.
"It's much, much, much, much better, like dramatically better, than any LNG alternative, and it will save billions of dollars to the Egyptian economy," NewMed CEO Yossi Abu told Reuters in an interview on Thursday.
Egypt's Ministry of Petroleum, which is also responsible for energy imports, did not immediately respond to a request for comment.
BIGGER AND BIGGER
Under Thursday's deal, Leviathan in a first stage will supply Egypt with 20 bcm of gas starting in early 2026 after the connection of additional pipelines.
It will export the remaining 110 bcm in a second phase that will begin after completion of the Leviathan expansion project and the construction of a new transmission pipeline from Israel to Egypt via Nitzana in Israel, NewMed said.
Israeli gas accounts for about 15-20% of Egypt's consumption, data from the Joint Organisations Data Initiative shows.
"We'll increase the flow to Egypt practically early next year, from the 4.5 bcm to 6.5 bcm. Then once we finish in 2029 the second phase of Leviathan, we will increase that to 12 bcm a year," Abu said.
The Leviathan reservoir began supplying Egypt shortly after production began in 2020. It signed an initial deal in 2019 for 60 bcm - or 4.5 bcm a year - that is expected to be fully supplied by the early 2030s.
The field, operated by Chevron, also supplies Jordan.
Leviathan's expansion, which would cost around $2.4 billion, should allow for production and supplies within Israel and to its neighbours through 2064, NewMed said.
NewMed said the deal will unlock further regional export opportunities.
"We are supplying Jordan, Egypt and Israel, and we'll continue to do that. We are aiming to see the natural gas flowing to additional countries in the region," Abu told Reuters.
Shares of NewMed, which holds 45% of Leviathan rose 5.5% in Tel Aviv. Ratio, another partner with a 15% stake, was up 4.4%. Chevron holds the remaining 40%.
(Reuters, August 7, 2025)
