Egypt signs record $35bn gas deal with Israel, paying 14 percent more for imports
The deal, which was announced on Thursday by Israeli energy company NewMed, will see 130 billion cubic metres (bcm) worth of gas piped from the Leviathan offshore field to Egypt through to 2040.
NewMed is one of three co-owners of the field, along with Israeli company Ratio and Chevron. It holds 45.34 percent of the gas reservoir.
This is a significant expansion of an existing deal struck between Egypt and Israel in 2018, which has seen 4.5 bcm worth of gas delivered to Egypt annually - despite Israel repeatedly interrupting its supply since its onslaught on Gaza began in October 2023. The current agreement is set to expire at the end of the decade.
The new deal will deepen Egypt's energy dependence on Israel, as Cairo steps up imports to address growing domestic demand amid a collapse in its own gas production over the last three years.
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Egypt's gaping energy gaps over the previous two summers have seen rolling blackouts amid soaring temperatures, sparking public anger.
The government has tried to plug the gap by boosting its liquefied natural gas (LNG) imports, which are projected to soar to $19bn this year, up from $12bn in 2024.
Israel currently supplies 15-20 percent of Egypt's gas consumption, according to the Joint Organisations Data Initative.
NewMed CEO Yossi Abu hailed the agreement as a 'win-win deal' that would save Egypt a 'tremendous amount of money' compared to importing LNG.
The gas is supplied via pipelines, making it cheaper than LNG imports, which need to be 'super-cooled' in order to be liquefied for transportation.
But according to Mada Masr, under the new deal, Egypt will pay roughly $35m more per bcm, representing a 14.8 percent increase on the previous deal.
A former Egyptian Petroleum Ministry official and a government source told Mada Masr last year that the two countries had been locked in months-long negotiations to boost the flow of Israeli gas to Egypt.
They said that Egypt was likely to agree to paying a higher price for imports as Israeli gas is its cheapest alternative to address shortfalls in its supplies.
'No assurance' conditions will be met
However, the implementation of the deal is contingent on the completion of pipelines and additional export infrastructure.
The first stage of the agreement, which will see 20 bcm of gas piped to Egypt in early 2026, depends on the completion of a new pipeline to the Leviathan reservoir and the expansion of a pipeline running between Israeli port cities Ashdod and Ashkelon- a project that has been stalled by Israel's onslaught on Gaza.
'If Egypt is free, Gaza will be free,' says activist who locked Cairo embassy Read More »
The second stage, which will see the flow of the remaining 110 bcm of gas to Egypt, hinges on the expansion of export infrastructure, including the construction of a new onshore pipeline from Israel to the Egyptian border at Nitzana, which has not commenced yet.
A notice issued by NewMed on Thursday warned that there was 'no assurance' that these conditions will be met.
The move comes amid mounting public anger over Cairo's alleged complicity in Israel's siege on Gaza, where nearly 200 Palestinians have died of Israeli-imposed starvation.
In July, two men who stormed the Ma'asara police station in Cairo in protest of Egypt's failure to open the Rafah crossing into Gaza, to allow life-saving aid into the territory, were forcibly disappeared.
This came shortly after a wave of protests the previous week outside Egyptian embassies in European capitals, sparked by activist Anas Habib in the Netherlands, who symbolically locked embassy gates to protest the Rafah closure.
Egyptian President Abdel Fattah el-Sisi has refuted the accusations. At a summit in Cairo this week, he condemned the 'shortcoming in the values of the international community in addressing crises' and dismissed allegations of Egypt's complicity in Israel's ongoing onslaught on Gaza, which has killed over 60,000 Palestinians, as 'strange talk'.
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