#Israel #Tel Aviv #NewMed Energy #Leviathan #Gas Export

Historic Gas Export Agreement

On August 7, 2025, NewMed Energy and its partners announced a groundbreaking agreement to sell natural gas from the Leviathan reservoir to the Egyptian market. This deal, valued at approximately $35 billion, represents the largest export agreement in Israel's history and underscores the pivotal role that natural gas plays in regional energy dynamics.

Overview of the Agreement

The total quantity of gas to be exported under this agreement is approximately 130 BCM (billion cubic meters), or 4.59 TCF (trillion cubic feet). The arrangement is structured in two main phases:
1. Phase One: Involves the sale of about 20 BCM (0.7 TCF) of gas starting from the first half of 2026.
2. Phase Two: Will follow the completion of the Leviathan expansion project, exporting an additional 110 BCM (3.88 TCF) of gas.

This strategic export deal builds upon an existing framework for gas exports to Egypt, which has already seen approximately 60 BCM sold under previous contracts. The initial agreement began in 2019 and became effective following an increase in production from Leviathan, which commenced in January 2020.

Key Details of the Transaction

The new agreement will succeed the previous contract set to expire in the early 2030s, once the full contracted amount of 60 BCM is sold. To date, around 23.5 billion cubic meters of gas from Leviathan have reached Egyptian markets.

The two-phase approach of the deal ensures robust supply and paves the way for significant future developments in energy cooperation between Israel and Egypt.

Phase One

The first phase will kick off once specific infrastructure upgrades are completed. These include:

• - The addition of a third pipeline connecting the Leviathan reservoir to the existing production platform.
• - Connecting the existing Ashdod-Ashkelon gas pipeline, which is expected to boost capacity.

Following these enhancements, the initial export to Egypt will amount to an additional 2 BCM annually, contributing to a total of 20 BCM over the course of the agreement.

Phase Two

Once the Leviathan expansion project is completed, the second phase of the deal is expected to commence. This expansion project aims to increase Israel's gas production capacity by approximately 30%, elevating it to around 21 BCM annually. It also includes constructing a new pipeline to enhance the export capacity from Israel to Egypt.

Economic and Strategic Implications

The deal's projected value of approximately $35 billion by 2040 emphasizes the economic significance of energy exports in the region. The revenue will be derived based on a pricing formula closely linked to Brent crude oil prices.

Yossi Abu, CEO of NewMed Energy, remarked, "This is the most strategically significant export deal ever concluded in the Eastern Mediterranean, solidifying Egypt's position as a vital hub in the region. The Leviathan project has brought numerous benefits to both the local and international landscape."

Abu also expressed gratitude towards partners and stakeholders involved in making this landmark deal a reality, highlighting the potential for further export opportunities in the region.

The completion of this agreement is anticipated to bolster future investments in the Leviathan expansion, positioning it as a pivotal player in meeting the energy needs of the region up to 2064 and beyond.

Conclusion

NewMed Energy's monumental agreement with Egypt is not only a testament to the growing ties between Israel and its neighbors but also reinforces the significant role natural gas plays in the transition towards sustainable energy solutions. As the Leviathan reservoir continues to expand and adapt to market demands, the future of energy exports in this region remains promising and influential.