Israel Signs $35 Billion Natural Gas Export Deal with Egypt - Infrastructure Expansion is Underway

In a major development for the region’s energy sector, New Med Energy, part of the Delek Group, along with the Leviathan gas field partners, announced the signing of a landmark agreement to export natural gas to Egypt worth $35 billion through 2040.

The new deal doubles the volume of the original export agreement signed in 2020 and is expected to significantly boost both the Israeli and Egyptian economies, as well as regional energy cooperation.

Deal Doubles Export Volumes to 190 BCM

According to New Med Energy CEO Yossi Abu, the original agreement signed in 2020 covered the export of 60 billion cubic meters (BCM) of natural gas. Under the new terms, an additional 130 BCM will be supplied to Egypt, bringing the total to 190 BCM over the life of the contract.

“We are already exporting about 25 BCM to Egypt under the original deal,” said Abu. “What we did today is double the original deal. Based on this expansion, we plan to invest about $3 billion in the local economy over the next three years.”

Infrastructure Expansion Underway

To meet the increased demand, substantial investment in infrastructure will be required. Abu outlined plans to carry out new drilling, expand treatment facilities, and construct new export pipelines from the Leviathan reservoir to Egypt.

“We have more than 600 BCM in Leviathan. To produce it, we need to build the necessary infrastructure,” Abu explained. “This investment will boost the Israeli economy and double the capacity of the system to serve both the export deal and the domestic market.”

State to Reap Long-Term Revenues

Although the government is not directly investing in the infrastructure, Abu emphasized that the Israeli state stands to gain significantly from the deal.

“The Israeli government will receive 50% of the revenues through taxes and royalties,” he noted. “There’s a 23% corporate tax on royalties, and after investment costs are recovered, the money goes into the sovereign wealth fund.”

According to Abu, the deal will translate into tens of billions of shekels in state revenue over time, benefiting both public coffers and investors.