Egypt has signed a landmark agreement to significantly increase its imports of natural gas from Israel’s Leviathan field, in a move that underscores Cairo’s growing dependence on foreign supplies amid surging domestic demand and falling output from its own reserves.

The multiyear deal, set to begin in 2026, is valued at about $35 billion and is being described as the largest export agreement in Israel’s history.

The contract, announced by Leviathan partner NewMed Energy LP, will see Israel supply 130 billion cubic meters of gas to Egypt between 2026 and 2040.

Speaking to reporters, NewMed CEO Yossi Abu called the agreement “a win-win for both sides,” noting the potential savings for Egypt compared to its current LNG import costs.

“It means tremendous savings to the Egyptian market vis-a-vis LNG imports, it’s 50% down on the current LNG import market.
“It provides security of energy supply for many, many years to come to feed the growth of the Egyptian economy.”
NewMed CEO Yossi Abu

Deliveries will begin in stages from next year, with current volumes of around 4.5 billion cubic meters a year gradually increasing. By 2033, annual exports could reach 12.5 billion cubic meters.

Egyptian officials view the agreement as a way to ease the pressure on the country’s strained energy system, which in 2024 saw Egypt slip back into being a net importer of gas.

Rising consumption at home and declining production from key domestic fields have forced Cairo to rely heavily on liquefied natural gas (LNG) purchases on the international market.

Those imports, while crucial, are costly, often priced at more than double the rate of pipeline gas from Israel.

For Israel and its energy partners, the deal represents both a commercial and strategic win. Under the first phase of the agreement, which begins in 2026, Israel will send 20 billion cubic meters of gas to Egypt.

The second and larger phase totaling about 110 billion cubic meters will depend on the completion of the Leviathan expansion project and the construction of a new pipeline from Israel to Egypt via Nitzana.

The gas will be sold to Egyptian buyer Blue Ocean Energy over the 14-year term, with payments tied to a formula linked to Brent crude oil prices.

This pricing structure, industry analysts say, provides predictability for both parties while aligning the contract with global energy market benchmarks.

Egypt-Israel Energy

Egypt has been buying increasing quantities of LNG to fill its energy gap, securing supplies out to 2028.

The new arrangement with Israel is expected to allow the country to reduce its reliance on more expensive LNG cargoes, potentially freeing up financial resources for other sectors of the economy.

However, the arrangement also comes with geopolitical risks. In June, flows of gas from Israel to Egypt were temporarily halted due to disruptions linked to the war with Iran, forcing Cairo to suspend supplies to certain industries, including fertilizer producers.

The episode exposed the vulnerabilities in the regional energy supply chain and highlighted the potential fragility of Egypt’s import strategy.

Despite these concerns, the long-term nature of the agreement signals both governments’ confidence in deepening their energy cooperation.

The deal not only cements Israel’s position as a major gas supplier to its neighbor but also provides Egypt with a stable supply source as it navigates the challenges of meeting domestic demand while maintaining its ambitions to remain a key player in the global LNG export market.

Shares in NewMed rose sharply on the news, climbing as much as 6.4% in Tel Aviv, the steepest intraday gain since February 4.

The company holds a 45.34% stake in the Leviathan field, alongside Chevron Corp., which owns 39.66%, and Ratio Energies LP with 15%.

The project is widely regarded as one of the most significant offshore gas discoveries in the eastern Mediterranean and a cornerstone of Israel’s energy export strategy.

For now, Egypt’s deal with Leviathan underscores the strategic importance of regional energy partnerships at a time of shifting supply dynamics and rising geopolitical uncertainty.

Whether the agreement ultimately strengthens Cairo’s energy independence or reinforces its import dependency will depend on how successfully the country can balance domestic production, consumption, and the risks of relying on external suppliers.