Egypt entered into a landmark $35 billion agreement on Thursday to import natural gas from Israel’s Leviathan field, calling it the largest export agreement in Israel’s history.
Israel will supply Egypt with approximately 130 billion cubic meters of natural gas by 2040 under the agreement with NewMed Energy, which owns a 45.3% stake in Leviathan. The deal marks Egypt’s largest long-term energy supply arrangement, bolstering regional energy cooperation despite ongoing tensions in the Middle East.
The deal, completed with Egypt’s Blue Ocean Energy, builds substantially on a previous agreement and is expected to safeguard Israel’s domestic gas supply for the long term.
The new deal will be implemented in two phases. In Phase One, an additional 20 BCM of gas will be supplied, with deliveries set to begin in 2026 after key infrastructure enhancements are completed. These upgrades include the construction of a third pipeline connecting the reservoir to the production platform, raising capacity to over 14 BCM annually, and the completion of the Ashdod–Ashkelon transmission line, which will enable increased flow through the EMG pipeline to Egypt. Under this phase, 2 BCM per year will be exported.
Phase Two involves the sale of an additional 110 BCM of gas, dependent on the completion of the Leviathan Expansion Project and the development of a new pipeline through Nitzana. Once these projects are in place, Leviathan’s annual capacity will increase to 21 BCM, around 30% more than its current production, enabling exports of up to 12 BCM per year under the agreement.
This agreement will ease Egypt’s increasing urgency to obtain stable energy resources vital for its economic revival. The IMF has raised Egypt’s growth projection for 2024–2025 to 3.8%, while the Central Bank forecasts a more robust 4.3% growth, up from just 2.4% in the previous fiscal year.
Located off Israel’s Mediterranean coast, the Leviathan gas field holds around 600 billion cubic meters of reserves and has emerged as a cornerstone of Israel’s energy export strategy. Under the current agreement, the field currently provides Egypt with roughly 4.5 billion cubic meters of natural gas each year.
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