Israel greenlights $35 billion gas export agreement with Egypt

The agreement also includes planned investments of NIS 15-16 billion in Israeli gas infrastructure, aimed at increasing output from the Leviathan reservoir and expanding pipeline capacity to meet growing domestic demand.

By Pesach Benson, TPS

Prime Minister Benjamin Netanyahu announced on Wednesday that he has approved what he described as the largest energy deal in Israel’s history, a natural gas export agreement with Egypt valued at NIS 112 billion ($34.7 billion), a move he said would significantly bolster the Israeli economy and strengthen regional stability.

Speaking in a recorded statement alongside Energy Minister Eli Cohen, Netanyahu said NIS 58 billion ($18 billion) from the deal is expected to flow directly into state coffers over its lifetime.

He outlined a gradual revenue curve, noting that during the first four years the state would receive roughly NIS 500 million ($155 million), as companies focus on infrastructure investments, with annual revenues rising to about NIS 6 billion ($1.9 billion) by 2033.

“This money will strengthen education, health, infrastructure, security, and the future of the coming generations,” Netanyahu said. He stressed that his approval followed months of delays and scrutiny, emphasizing that the agreement moved forward only after Israel’s security and economic interests were fully safeguarded.

Netanyahu argued that the agreement cements Israel’s role as a leading energy player in the Eastern Mediterranean.

“The deal greatly strengthens Israel’s position as a regional energy superpower, and contributes to regional stability,” he said, adding that it is expected to encourage additional companies to invest in gas exploration in Israel’s economic waters.

Addressing domestic concerns, Netanyahu underscored that the companies involved are obligated to prioritize the local market.

“First and foremost, this deal requires the companies to sell natural gas to Israeli citizens at a good price,” he said.

Referencing earlier criticism of Israel’s gas development policy, he added that fears the industry would harm the economy had proven unfounded.

“Today it is clear that taking the gas out of the water brought a huge blessing to the State of Israel,” he said.

Energy Minister Eli Cohen described the approval as a milestone on multiple levels. “This is a historic moment for the State of Israel,” Cohen said.

“It is the largest export deal in the country’s history, and it establishes our status as a leading regional energy powerhouse that our neighbors rely on.”

He noted that the agreement was finalized after “several months of intensive negotiations,” during which mechanisms were introduced to improve pricing terms for Israel’s domestic economy.

As part of the deal, gas reservoir owners are required to re-offer pricing alternatives for the local market, including a cap on the maximum price per unit of heat, as well as limits ensuring that short-term gas sales do not exceed the price of long-term contracts.

The agreement also includes planned investments of NIS 15-16 billion in Israeli gas infrastructure, aimed at increasing output from the Leviathan reservoir and expanding pipeline capacity to meet growing domestic demand.

Chevron Mediterranean Limited welcomed the government’s decision, calling it a key step toward expanding production capabilities.

“This significant milestone reflects the strong partnership between Chevron and the State of Israel,” the company said, adding that it underscores a shared commitment to advancing energy security for Israel and the broader region.

The approval follows a deal signed in August between the Leviathan field’s partners and Egypt, valued at approximately $35 billion, and comes after diplomatic and political pressure to finalize the agreement, which officials say could also pave the way for higher-level regional engagements in the coming weeks.

The U.S. is said to have put heavy pressure on Jerusalem to approve the deal. U.S. Energy Secretary Chris Wright canceled a visit to Israel in October after Cohen refused to approve the agreement.