Israel has signed its largest-ever export agreement to send natural gas to Egypt, even as Cairo voices growing anger over Israel's genocide in Gaza.
The deal, announced Thursday by NewMed Energy, one of the three co-owners of Israel’s Leviathan gas field, will see Israel export up to $35 billion worth of natural gas to Egypt through 2040.
Egypt, which relies heavily on Israeli gas for domestic use, has struggled with an energy crisis in recent years. Its own natural gas supplies have fallen short of demand, forcing Cairo to spend billions on liquefied natural gas (LNG) imports.
Israeli gas currently accounts for about 15–20 percent of Egypt's consumption, according to the Joint Organisations Data Initiative.
The Leviathan field, located off Israel’s northern coast, resumed operations in late June after a temporary shutdown during Israel’s 12-day air war with Iran. It also supplies gas to Jordan.
Under the new agreement, Leviathan will deliver around 130 billion cubic metres (bcm) of gas to Egypt. The first stage involves exporting 20 bcm starting early next year once additional pipelines are installed. The remaining 110 bcm will follow after an expansion of Leviathan and the construction of a new transmission pipeline via Nitzana.
"It's much, much, much, much better, like dramatically better, than any LNG alternative, and it will save billions of dollars to the Egyptian economy," NewMed CEO Yossi Abu told Reuters.
Transferring gas through pipelines is significantly cheaper than shipping LNG, making the deal financially attractive for Egypt despite rising political tensions.
Cairo has grown increasingly critical of Israel's actions in Gaza, where more than 60,000 people have been killed during the 22-month war. Nearly 200 Palestinians have died from starvation as Israeli forces continue to block food aid at the Rafah border crossing, despite supplies waiting on the Egyptian side for weeks.
Egypt, alongside Qatar and the US, has played a central role in ceasefire negotiations between Israel and Hamas, but frustrations have mounted over Israel's expanding military operations and aid restrictions.
Despite the strain, Egypt has maintained economic and energy ties with Israel, continuing to pursue deals that serve its domestic needs, even as public opinion and political rhetoric become more hostile.