Ahmed Kamel – Egypt Daily News
In a landmark agreement that marks the largest energy export deal in Israel’s history, Israel’s Leviathan gas field partners have signed a revised contract to supply Egypt with natural gas worth up to $35 billion through 2040. The deal significantly boosts regional energy ties and strengthens Egypt’s strategic role as a hub for Eastern Mediterranean energy.
Announced Thursday by NewMed Energy, one of the primary partners in the offshore Leviathan field, the agreement expands upon a 2019 preliminary supply deal and outlines the export of approximately 130 billion cubic meters (bcm) of gas over a 15-year period. The announcement was first reported by Reuters.
Located off the Israeli Mediterranean coast, the Leviathan gas field holds an estimated 600 bcm in reserves and is the largest of its kind in the Eastern Mediterranean. Gas exports from the field to Egypt began shortly after Leviathan came online in 2020, with roughly 23.5 bcm exported so far. The new deal represents a massive escalation in both volume and duration of gas flows between the two countries.
Deal Details: Two-Phase Supply Plan
Under the revised agreement, signed with Egypt’s Ocean Energy, the exports will be delivered in two phases:
- Phase One involves the supply of 20 bcm, to begin in early 2026 after the completion of new pipeline infrastructure connecting the field to Egypt via the Nitzana (Al-Auja) border crossing.
- Phase Two, conditional on further investment and infrastructure expansion, will supply an additional 110 bcm, bringing the total volume to 130 bcm.
NewMed Energy noted that the expanded infrastructure and field development will not only ensure contract fulfillment but also extend Leviathan’s operational viability until at least 2064.
“This is the most strategic export deal ever signed in the Eastern Mediterranean,” said Yossi Abu, CEO of NewMed Energy. “It highlights Egypt’s growing role as a regional energy hub and underscores the power of cross-border cooperation in the energy sector.”
Egypt’s Energy Pivot
Egypt’s revised agreement with Israel arrives at a time of increased domestic demand and infrastructural challenges. Once aspiring to become a gas exporter to Europe, Egypt has recently faced widespread electricity shortages, partly due to fiscal constraints and a drop in domestic gas production.
As a result, Egypt has returned to the global market as a net importer of gas. Over the past year, the country has signed contracts for between 150 and 160 shipments of liquefied natural gas (LNG) to meet internal needs, signaling a major strategic shift from exporter to consumer.
A senior Egyptian official, speaking to Asharq News, confirmed that Egypt is currently importing 1.1 billion cubic feet per day (bcf/d) of Israeli gas. That volume is expected to rise to 1.2 bcf/d in January 2026 and reach 1.5–1.6 bcf/d by late 2026, depending on infrastructure readiness.
Security, Sanctions, and Supply Disruptions
The timing of the deal also reflects broader geopolitical considerations. During the June conflict between Israel and Iran, operations at Leviathan were temporarily halted due to security risks, underlining the vulnerability of regional energy infrastructure to political instability.
Furthermore, the deal is being signed as global energy markets remain tense due to shifting U.S. policies and ongoing sanctions against major producers like Russia. Natural gas pricing and supply chains remain volatile, giving energy-exporting nations in the Eastern Mediterranean an increasingly prominent role.
The U.S., EU, and international energy companies are closely watching the Eastern Mediterranean region as a potential alternative energy corridor to reduce reliance on Russian gas.
Strategic Implications
For Israel, the deal represents a significant windfall. If all contracted volumes are delivered, Israel stands to generate up to $35 billion in revenue an unprecedented figure in its energy sector. The deal cements the Leviathan field’s place as the cornerstone of Israel’s regional energy policy.
For Egypt, the agreement provides a lifeline to manage growing domestic energy demands, especially amid a heatwave-driven power crisis and fiscal strain. It also revives its ambitions albeit on revised terms to act as a major energy trading and liquefaction center for the region, supported by its LNG export terminals on the Mediterranean coast.
Looking Ahead
Construction of new pipelines and expansion of Leviathan’s facilities are expected to begin soon. Once operational, they will form a critical energy corridor connecting Israeli gas fields directly to Egyptian liquefaction hubs potentially enabling future re-export to Europe and beyond.
While the deal is framed primarily as a commercial energy agreement, its significance extends far beyond economics. It reflects a broader realignment in the Eastern Mediterranean, where energy cooperation increasingly transcends historical tensions and geopolitical divides.
“This agreement is not just about gas,” said a senior regional analyst. “It’s about reshaping alliances and anchoring peace through economic interdependence.”
