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Middle East Eye
5 days ago
- Business
- Middle East Eye
Egypt signs record $35bn gas deal with Israel, paying 14 percent more for imports
Egypt has signed a record $35bn gas deal with Israel, almost tripling its gas imports from the Israeli Leviathan gas fields and marking the largest export deal in Israel's history. 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. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters 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'.
Roya News
5 days ago
- Business
- Roya News
'Israel', Egypt sign record $35 billion gas deal
Partners in 'Israel's' Leviathan offshore natural gas field have signed a $35 billion agreement to increase gas exports to Egypt. The deal, which is the largest export agreement in 'Israel's' history, will see approximately 130 billion cubic meters (bcm) of natural gas supplied to Egypt through 2040. This transaction comes at a time when diplomatic relations between Cairo and Tel Aviv are at their lowest point in years due to the ongoing Gaza aggression. Yossi Abu, CEO of NewMed Energy, which holds 45.34% of the Leviathan reservoir, said the deal will fund the necessary infrastructure expansion to ensure a stable domestic gas supply until at least 2064. The deal is also expected to generate hundreds of millions of shekels in state revenue from royalties and taxes. Egypt's domestic gas production has been in sharp decline, falling from a peak of 71 bcm in 2021 to just 45 bcm in 2024, largely due to reduced output from its primary Zohr field. This energy deficit has led to expensive liquefied natural gas (LNG) imports and planned rolling blackouts that have sparked public anger in the country. The new agreement, signed with Egypt's Blue Ocean Energy (BOE), is set to eventually triple the amount of gas 'Israel' exports to its neighbor annually. The implementation of the deal is a phased process that is contingent on significant infrastructure projects, including a third pipeline to the Leviathan platform and new transmission pipelines to Egypt. The first phase, involving 20 bcm of gas, is expected to begin in the first half of 2026, while the second phase, for the remaining 110 bcm, will follow the completion of the broader Leviathan expansion project. Legal experts argue that a pipeline central to the deal, which runs through Palestinian maritime zones, breaches international law because it was constructed without the consent or compensation of the Palestinian Authority. Furthermore, the Leviathan field, operated by a consortium including NewMed Energy, Chevron, and Ratio Energies, has been identified as a "carbon bomb" with the potential to emit 1.06 billion tons of carbon dioxide over its lifetime. The operator has also faced scrutiny for attempting to halt air quality monitoring near its platform, a move reversed only after public and environmental pressure .
Days of Palestine
5 days ago
- Business
- Days of Palestine
Israel Signs $35 Billion Natural Gas Deal with Egypt Amid Gaza War, Humanitarian Crisis
DayofPal— Israel's Leviathan natural gas field has finalized the largest export deal in the country's history, agreeing to supply natural gas to Egypt's NewMed in a contract valued at up to $35 billion. The agreement comes amid ongoing international outcry over Israel's military campaign in Gaza, which has killed over 60,000 Palestinians and left the population facing starvation due to an Israeli-imposed blockade on humanitarian aid. According to Reuters, which cited one of the field's partners, the deal was officially announced on Thursday. Under the terms of the agreement, Leviathan, located off Israel's Mediterranean coast and holding an estimated 600 billion cubic meters of reserves, will supply approximately 130 bcm (billion cubic meters) of natural gas to Egypt through 2040, or until all contracted volumes are delivered. Export operations from Leviathan had been temporarily halted during Israel's 12-day military assault on Iran in June due to security concerns, but have since resumed, Reuters reported. NewMed CEO Yossi Abu hailed the deal, emphasizing its economic significance for Egypt. '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,' he told Reuters. Egypt's Ministry of Petroleum, which manages the country's energy imports, has not issued a comment on the deal. As part of the first phase of the agreement, Leviathan will deliver 20 bcm of gas to Egypt starting in early 2026, following the completion of new pipeline connections. Israeli gas currently accounts for approximately 15–20% of Egypt's total energy consumption, according to data from the Joint Organisations Data Initiative. The timing of the announcement has drawn criticism due to the ongoing humanitarian crisis in Gaza. Since October 2024, Israel's offensive has led to widespread destruction and loss of life, while aid agencies warn that conditions in the territory have reached catastrophic levels. A blockade imposed since March 2 has severely restricted humanitarian access, exacerbating the crisis. International protests have erupted over Egypt's perceived role in the siege. Demonstrators in countries including Sweden, Ireland, the UK, Spain, Finland, South Africa, Libya, and Turkey have demanded that Egypt open the Rafah crossing to facilitate the delivery of aid into Gaza. Responding to the accusations, Egypt's Ministry of Foreign Affairs issued a statement condemning what it called a 'malicious propaganda campaign,' and maintained that 'Rafah has remained open from the Egyptian side. Israeli forces control the Palestinian side and block access.' Egyptian President Abdel Fattah El-Sisi has publicly condemned Israel's actions in Gaza, accusing it of perpetrating a 'systematic genocide.' Speaking at a press conference in Cairo, Sisi said the war had gone 'beyond political aims.' Despite the war, trade between Egypt and Israel has seen significant growth. According to Israel's Central Bureau of Statistics, Egyptian exports to Israel doubled in 2024 compared to the previous year. The normalization Institute reported a 56% rise in bilateral trade in 2023, with a 168% year-on-year increase in the fourth quarter alone. Shortlink for this post:
Mint
6 days ago
- Business
- Mint
Egypt Locks In Gas-Import Dependency With New Israel Deal
(Bloomberg) -- Egypt will boost its contracted purchases of natural gas from Israel's Leviathan field under a new agreement starting next year, deepening the country's dependence on imports of the fuel for the long haul. The deal reflects Egypt's desperate need for gas due to surging domestic demand and declining output from its own fields. While the multiyear contract offers lower prices than those available on the short-term global market, it calls into question the North African country's aspiration to return to being an exporter of the fuel. Leviathan's operators signed an agreement to send 130 billion cubic meters of gas to Egypt from 2026 to 2040, Israel's NewMed Energy LP, which is a partner in the project, said in a statement on Thursday. The export deal is worth about $35 billion, making it the largest in Israel's history, it said. The gas field already has a contract to send around 4.5 billion cubic meters a year to Egypt, which will rise in stages starting next year and could reach as much as 12.5 billion cubic meters a year by 2033. Egypt also purchased 2.5 billion cubic meters last year on the short-term market, a volume that can vary from one year to the next. Egypt became a net gas importer in 2024 and has since been buying up large volumes of liquefied natural gas, doing deals for supplies out to 2028. The additional Israeli flows may mean Cairo can import less LNG in the future than it would otherwise have had to do. Importing LNG has also raised Egypt's overall costs because the super-chilled fuel costs more than twice as much as pipeline gas from Israel. 'This is a win-win for both sides. It means tremendous savings to the Egyptian market vis-a-vis LNG imports — it's 50% down on the current LNG import market,' NewMed CEO Yossi Abu said in an interview. 'It provides security of energy supply for many, many years to come to feed the growth of the Egyptian economy.' While Leviathan's gas is cheaper, the interruption of flows from Israel to Egypt because of the war with Iran in June highlighted possible vulnerabilities in the supply route. The disruption forced Cairo to halt supplies to some industries including fertilizer producers. Read: Egypt Plans More LNG Deals, Driving Global Competition for Fuel Under the new agreement, gas will be delivered to buyer Blue Ocean Energy over 14 years with payments determined by a formula based on the price of Brent crude oil. During the first phase of the deal, set to take effect next year, 20 billion cubic meters of gas will be delivered to Egypt. The second phase, totaling around 110 billion cubic meters, requires completion of the Leviathan expansion project and the construction of a new pipeline from Israel to Egypt via Nitzana. Shares of NewMed rose as much as 6.4% in Tel Aviv, the steepest intraday gain since Feb 4. NewMed holds a 45.34% stake in Leviathan alongside Chevron Corp. with 39.66% and Ratio Energies LP with 15%. --With assistance from Omar Tamo, Galit Altstein and Paul Jarvis. (Updates with CEO comment in seventh paragraph.) More stories like this are available on
Yahoo
6 days ago
- Business
- Yahoo
NewMed signs $35bn natural gas supply deal with Egypt's Blue Ocean Energy
NewMed Energy, alongside partners in the Leviathan project, has signed an agreement for the sale of natural gas from the Leviathan reservoir to Egypt. The contract, signed with Blue Ocean Energy, an existing customer of Leviathan, is valued at approximately $35bn (Dh128.54bn) and involves the transfer of around 130 billion cubic metres (bcm) or 4.59 trillion cubic feet of natural gas. This deal represents the most significant export transaction in Israel's history and underscores the strategic importance of the Leviathan gas field since its discovery. The gas sales to Egypt are projected to continue until 2040 or until the agreed quantities are fully supplied. Production and export to Egypt began in January 2020, with current supplies totalling approximately 60bcm under contract, and an annual volume of 4.5bcm, plus additional spot sales. NewMed Energy CEO Yossi Abu said: 'This is the most strategically important export deal to ever occur in the eastern Mediterranean and strengthens Egypt's position as the most significant hub in the region. 'Since it begun production, Leviathan has brought many benefits both domestically and internationally, and the reservoir's expansion has been NewMed's key priority for years. This deal, made possible by our strong regional partnerships, will unlock further regional export opportunities, once again proving that natural gas and the wider energy industry can be an anchor for collaboration.' The existing export agreement with Egypt, established in 2019, will be superseded by this new arrangement upon completion of the contracted 60bcm, expected in the early 2030s. To date, around 23.5bcm of natural gas has been sold from Leviathan to the Egyptian market. The new deal is structured in two stages, with the first concerning the sale of 20bcm and the second the sale of an additional 110bcm. The latter is contingent upon the completion of the Leviathan expansion project and the construction of a new pipeline to Egypt via Nitzana. The first stage is set to commence in the first half of 2026, following the completion of a third pipeline to the production platform and the Ashdod-Ashkelon transmission pipeline, increasing annual sales to Egypt by 2bcm. The second stage will begin after the Leviathan expansion project's completion, which is expected to boost Israel's natural gas production by 30% and increase the reservoir's annual production capacity to approximately 21bcm. Total gas exports for the second stage are estimated at 110bcm, with annual variations, culminating in a total annual quantity of roughly 12bcm from Leviathan to Egypt. The pricing of the natural gas is primarily linked to Brent oil prices, and the total sale is expected to generate around $35bn in revenue for all partners involved in the reservoir. The finalisation of this deal is a critical step towards the final investment decision for the Leviathan expansion project (phase 1B), which includes drilling additional wells, expanding subsea systems, upgrading processing facilities and potentially laying a fourth pipeline. "NewMed signs $35bn natural gas supply deal with Egypt's Blue Ocean Energy" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
