In a landmark move reshaping East Mediterranean energy dynamics, Israel’s Leviathan Partnership has signed a record $35 billion natural gas export agreement with Egypt. The deal, finalized between NewMed Energy and Egypt’s Blue Ocean Energy, will supply an estimated 130 billion cubic meters (BCM) of gas from the offshore Leviathan field through 2040, marking the largest such transaction in Israeli history.
The new accord upgrades a previous 2020 deal and commits to a two-phase delivery expansion. Phase One will add 20 BCM beginning in 2026, contingent on infrastructure upgrades including a third pipeline from Leviathan to its production platform and the completion of the Ashdod-Ashkelon transmission line. These enhancements will raise export capacity above 14 BCM per year, enabling 2 BCM annually to be routed to Egypt via the EMG pipeline.
Phase Two will hinge on final approval of the Leviathan Expansion Project (Phase 1B), and the construction of a new export route via Nitzana. Once operational, total output will increase to 21 BCM annually, with up to 12 BCM per year allocated to Egypt. This represents a 30% rise in capacity over current levels. The pricing formula is tied to Brent crude benchmarks and awaits regulatory export clearance and a final investment decision.
According to NewMed, as cited by the Times of Israel, Leviathan still holds over 600 BCM in reserves, enough to sustain output through 2064. As of mid-2025, 23.5 BCM has been delivered under the original contract, with export volumes running near 4.5 BCM annually.
Production at Leviathan only resumed late last month after a two-week shutdown triggered by Israeli strikes on Iranian nuclear facilities during a sharp escalation in regional conflict. Following a ceasefire brokered by U.S. President Donald Trump, Israel’s Energy Ministry authorized Chevron to restart operations at the Leviathan platform. Jordan and Egypt, key buyers of Israeli gas, had scrambled to replace lost volumes during the outage, which also drove up European gas prices amid broader supply fears.
NewMed CEO Yossi Abu called the deal “a tool for strategic reality change,” while Delek Group owner Yitzhak Tshuva said it “strengthens regional cooperation and promotes stability.”
The Israeli Energy Ministry estimates total future exports from Leviathan could reach 145 BCM, with further deals anticipated as infrastructure scales up.
By Charles Kennedy for Oilprice.com
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