#Israel #Tel Aviv #NewMed Energy #Leviathan Reservoir #Egypt Gas Deal

NewMed Energy's Groundbreaking Export Agreement

In an unprecedented move in the energy sector, NewMed Energy, alongside its partners in the Leviathan project, has finalized a monumental agreement for natural gas exports to Egypt. Valued at approximately $35 billion, this deal solidifies itself as the most significant export arrangement in Israel's history, signaling a new era of energy collaboration in the region.

Agreement Overview

The agreement consists of a total of around 130 billion cubic meters (BCM), or 4.59 trillion cubic feet (TCF) of natural gas. It will be executed in two phases, with the initial phase set to commence in 2026, delivering approximately 20 BCM (0.7 TCF). Following this, the second phase will allow an additional 110 BCM (3.88 TCF) of natural gas to be exported after the completion of ongoing expansions at the Leviathan site.

Significance of the Deal

The completion of this agreement underscores the strategic importance of energy exports for Israel, particularly the role of the Leviathan reservoir, which has been operational since January 2020. So far, it has provided Egypt with contracts totaling around 60 BCM, reinforcing the collaborative energy relationship between the two nations. CEO Yossi Abu of NewMed Energy remarked, “This is the most strategically important export deal to ever occur in the eastern Mediterranean.”

As the project unfolds, it is anticipated that the overall valuation could reach $35 billion by 2040, provided that the contract volumes are fully realized.

Phased Implementation

The first phase is designed to ramp up gas delivery immediately following the completion of two critical projects:

• - The installation of a third pipeline from the Leviathan reservoir to enhance gas output to over 14 BCM (0.5 TCF) annually.
• - Modifications to the Ashdod-Ashkelon transmission pipeline to significantly boost gas transportation capabilities by an additional 2 BCM.

Both projects are slated for completion by early 2026, ensuring that the initial shipments to Egypt can seamlessly commence.

The second phase of the deal will kick into gear post the expansion of the Leviathan site, projected to amplify output by 30%, reaching an annual production capacity of up to 21 BCM (0.74 TCF). A new transmission pipeline to Nitzana will further facilitate the flow of natural gas exports to Egypt, exemplifying the growing energy ties within the region.

Future Outlook

The deal aims not only to satisfy existing export requirements but also solidifies NewMed's strategic position in the international energy landscape. As Yossi Abu emphasized, the expansion of Leviathan is a top priority for the company and is expected to open further avenues for future exports.

Recent reports from the Leviathan reservoir reveal about 600 BCM (21.2 TCF) of prospective resources, ensuring supply reliability in the years to come, until at least 2064. The operational lifespan estimates combined with the comprehensive nature of this agreement foreshadow a robust partnership between Israel and Egypt— one that could redefine energy exchange in the Eastern Mediterranean in the coming decades.

Conclusion

This landmark deal positions both nations as key players in the global energy market, and NewMed Energy is at the forefront of this significant shift. As the company prepares for an English-language webinar to discuss the nuances of the agreement, the energy landscape in the region stands poised for transformation, driven by mutual cooperation and investment.