Egypt to build pipeline for Israeli gas despite Gaza war

The Egyptian government is preparing to construct a new pipeline to carry additional supplies of Israeli gas, according to local economic bulletin Enterprise on Monday, in a deal that has already drawn scrutiny given Israel’s ongoing war on Gaza.

Government sources told Enterprise that construction will begin early next year, while other media reports said work is scheduled for the last quarter of 2025, in preparation for receiving new gas volumes from 2026 under Egypt’s agreement with Israel’s NewMed company.

Under the deal, Egypt will import 130 billion cubic metres of gas from Israel’s Leviathan field at a cost of $35 billion between 2026 and 2040. A source told Enterprise the project was agreed upon years ago but delayed due to financial problems and regional instability.

Construction is expected to finish by 2028. Egypt will contribute $200 million toward the cost, with Israeli companies providing a similar sum. Once engineering details are finalised, state-owned Egyptian Natural Gas Company (GASCO) is expected to carry out the work.

An Egyptian government source previously said the additional Israeli gas would be supplied to liquefaction plants in Damietta and Idku before being re-exported to Europe.

Imports from Israel are already at record levels. Egypt purchased 890 million cubic feet per day of natural gas from its neighbour in July, the highest level in three months and a 59 percent increase month on month, according to data from the energy platform Mees.

The pipeline plan comes as Israel presses on with its military campaign in Gaza, which has killed tens of thousands of Palestinians and been described by genocide scholars and human rights organisations as amounting to genocide.

The deepening energy partnership has fuelled criticism of Cairo’s role, with opponents accusing Egypt of strengthening Israel economically while Gaza suffers a blockade and destruction.

Egypt, which has historically presented itself as a supporter of Palestinian rights, has faced growing scrutiny for maintaining and expanding its energy ties with Israel even as public anger mounts in the Arabic-speaking world. Critics argue that profits from Israeli gas exports help finance Israel’s war machine.

Officials in Cairo argue the imports are necessary to meet domestic demand and preserve Egypt’s role as a key regional exporter of liquefied natural gas to Europe.

Once a regional energy exporter, Egypt has increasingly relied on imports as production from ageing fields falls and investment in new ones is delayed. According to the Joint Organisations Data Initiative (JODI), gas output in May was 3,545 million cubic metres, more than 40 percent lower than in March 2021.

Despite major discoveries such as the Zohr field in the Mediterranean, production has not returned to the 2019 peak. Local consumption continues to rise, particularly during peak summer months.

Prime Minister Mostafa Madbouly said in August that Egypt aims to raise natural gas production to 6.6 billion cubic feet per day by 2027, up from 4.1 billion cubic feet per day currently.

The new pipeline is intended to bridge the gap between supply and demand while ensuring Egypt can continue to serve European markets. But with the war in Gaza ongoing, the expansion of Egyptian-Israeli energy ties is likely to raise further questions about Egypt's role in the assault and famine-causing siege on the Palestinian enclave.