Israel and Egypt have entered into a landmark $35 billion agreement for the export of natural gas, marking the largest energy deal in Israel’s history and significantly expanding energy cooperation between the two countries.
Under the deal, announced this week, Israel will supply a total of 130 billion cubic meters of gas from its Leviathan offshore field to Egypt through 2040 or until the full volume is delivered. The agreement will be executed in two phases, with the first phase expected to begin in early 2026 once new pipeline connections are completed.
According to officials, the first phase will see the delivery of 20 billion cubic meters of gas to Egypt. The second phase, which involves a major expansion of the Leviathan field, will supply an additional 110 billion cubic meters through a new transmission pipeline to be constructed via Nitzana, near the Israel-Egypt border.
The Leviathan consortium — made up of NewMed Energy, Chevron, and Ratio Oil Corp will oversee the expansion, while exports will be managed through Blue Ocean Energy.
Energy officials from both countries described the agreement as a milestone that will not only strengthen Israel’s energy security but also enhance Egypt’s position as a key processing and re-export hub for liquefied natural gas (LNG) in the Eastern Mediterranean.
“The deal represents a strategic partnership that promotes long-term regional stability and economic integration,” Israeli energy officials said in a joint statement.
To support the expanded exports, Israel will invest in critical infrastructure, including a third pipeline from Leviathan to its production platform, as well as upgrades to the Ashkelon-Ashdod pipeline, which links to Egypt. Leviathan’s annual output is expected to increase from 12 billion to over 21 billion cubic meters once the expansion is complete.
Leviathan began supplying gas to the Israeli market in late 2019 and started exports to Egypt in 2020. This latest deal will triple previous export volumes and significantly expand Israel’s role in the region’s energy landscape.
Egyptian officials said the deal aligns with Cairo’s long-term goal of becoming a regional energy hub. “This partnership enhances Egypt’s energy infrastructure and opens new avenues for regional cooperation,” an official from Egypt’s petroleum ministry said.
The agreement comes at a time of heightened political tensions in the region, particularly over Israel’s military campaign in Gaza. Despite the ongoing conflict, both countries appear committed to strengthening their economic and energy ties.
Regional analysts say the deal positions Israel and Egypt as strategic players in Europe’s search for alternatives to Russian gas, and could pave the way for similar arrangements with other countries in the Eastern Mediterranean.
France and South Korea had also vied for major energy projects in the region, but Israeli officials said the bids from Russia and China — in a separate nuclear energy context were ultimately more competitive.
The new agreement is expected to deepen Israel’s ties with Arab partners and contribute to long-term regional stability through economic interdependence, particularly in the energy sector.
