Israel’s NewMed Energy will supply Egypt with an additional 130 billion cubic meters of natural gas under a new $35 billion agreement, in what NewMed Energy described as the largest export deal in Israel’s history.
The agreement was announced Thursday by NewMed, one of the key partners in the Leviathan consortium, and builds on a previous 2019 contract to export 60 bcm of gas to Egypt. That original deal is expected to conclude in the early 2030s.
“This is the most strategically important export deal to ever occur in the eastern Mediterranean,” NewMed CEO Yossi Abu said in a statement. He added that it would cement Egypt’s role as a regional gas hub.
The new deal will be delivered in two phases. The first stage, expected to begin in the first half of 2026, will see 20 BCM exported once infrastructure upgrades are completed, including a third pipeline from the offshore field to its production platform and a connection to the Ashdod-Ashkelon network.
The second stage, totalling 110 BCM, will commence after the expansion of the Leviathan reservoir and the construction of a new pipeline to Egypt via the Nitzana crossing.
NewMed said the full volume should be supplied by 2040 or once all contracted gas is delivered. Leviathan currently holds estimated reserves of 600 BCM.
According to the company, around 23.5 BCM of gas has already been sent to Egypt since exports began in 2020. The new contract is expected to replace the existing deal once the contracted quantities are fulfilled.
Energy shortfalls in Egypt
The announcement comes as Egypt continues to grapple with declining gas output. Domestic production began to fall in 2023, leading to repeated power cuts and shortages in key sectors such as electricity generation and manufacturing.
The situation has been exacerbated by repeated, unannounced suspensions of gas supply from Israel, which Egypt has relied on since 2020.
In 2024, it expanded regasification capacity by leasing a unit from Australia’s Hoegh Galleon amid declining domestic production and irregular Israeli supplies due to the ongoing war on Gaza.
Egypt has increasingly relied on imports to meet domestic demand, which typically spikes in the summer.
In June, Egypt’s petroleum ministry activated a long-prepared emergency plan to prioritize gas distribution. The ministry cited disruptions in regional supply chains due to military operations, but did not specifically reference Israeli gas.
The Leviathan partners said the deal would help secure both regional supply and long-term returns. The pricing formula is linked to Brent crude prices, potentially offering Egypt more stable access to fuel amid global market volatility.
NewMed describes itself as Israel’s leading energy partnership in the exploration, development, production and sale of natural gas and condensate, that has “made history with its unprecedented agreements with Egypt, Jordan and the UAE which strengthened peace and increased stability in the Middle East.”
