Israel Secures Record $35 Billion Gas Deal with Egypt for Leviathan Expansion

Israel's Leviathan Partnership has signed a $35 billion natural gas export agreement with Egypt, marking the largest such transaction in Israeli history. The deal commits to supplying 130 BCM of gas from the offshore Leviathan field through 2040 and upgrades a previous 2020 deal. It also includes a two-phase delivery expansion and a pricing formula tied to Brent crude benchmarks. The agreement is seen as a tool for strategic reality change and promotes regional cooperation and stability.

Israel's Leviathan Partnership has signed a historic $35 billion natural gas export agreement with Egypt, marking the largest such transaction in Israeli history. The deal, finalized between NewMed Energy and Egypt’s Blue Ocean Energy, commits to supplying 130 billion cubic meters (BCM) of gas from the offshore Leviathan field through 2040 [1]. This agreement upgrades a previous 2020 deal and includes a two-phase delivery expansion.

The first phase will commence in 2026, adding 20 BCM of gas to the supply, contingent on infrastructure upgrades. The second phase, which hinges on the final approval of the Leviathan Expansion Project (Phase 1B) and the construction of a new export route via Nitzana, will increase total output to 21 BCM annually, with up to 12 BCM per year allocated to Egypt [2]. The pricing formula is tied to Brent crude benchmarks and awaits regulatory export clearance and a final investment decision.

The agreement is seen as a strategic move that could transform the energy landscape of the East Mediterranean region. It promotes regional cooperation and stability, as both countries seek to address their energy needs. According to NewMed, the Leviathan reservoir still holds over 600 BCM in reserves, enough to sustain output through 2064 [2]. As of mid-2025, 23.5 BCM has been delivered under the original contract, with export volumes running near 4.5 BCM annually [2].

The deal is expected to ease Egypt's energy crisis, which has been exacerbated by a decline in domestic production. Egypt's gas production fell by over 42% between March 2021 and May 2023, according to the Joint Organisations Data Initiative (JODI) [1]. The Israeli gas is much cheaper than imported liquefied natural gas (LNG), making it an attractive alternative for Egypt [1].

The agreement comes at a time when regional conflicts have disrupted gas supplies. Production at Leviathan resumed late last month after a two-week shutdown triggered by Israeli strikes on Iranian nuclear facilities [2]. The ceasefire brokered by U.S. President Donald Trump allowed Chevron to restart operations at the Leviathan platform [2].

The Israeli Energy Ministry estimates total future exports from Leviathan could reach 145 BCM, with further deals anticipated as infrastructure scales up [2]. The deal is seen as a tool for strategic reality change and promotes regional cooperation and stability [2].

References:
[1] https://www.marketscreener.com/news/update-3-israel-s-leviathan-signs-35-billion-natural-gas-supply-deal-with-egypt-ce7c5edfdc8cf527
[2] https://oilprice.com/Latest-Energy-News/World-News/Israel-Signs-35-Billion-Gas-Deal-with-Egypt-in-Historic-Leviathan-Expansion.html