A groundbreaking $35 billion gas export deal between Israel and Egypt is on the brink of approval, but this story is far from straightforward. It's a complex web of international politics, energy needs, and controversial decisions that have left many questioning the motives behind this massive agreement.
The Deal: A Lifeline for Egypt's Energy Crisis
Egypt, facing a severe energy crisis, has turned to Israel for a solution. With a rapidly growing population and a failing energy sector, Egypt's annual consumption of natural gas far exceeds its production. In 2024, production plummeted to a mere 45 BCM, while consumption remained at a staggering 70 BCM.
The deal, initially signed in August, involves the export of 130 BCM of gas from Israel's Leviathan field to Egypt over an extended period, potentially beyond 2040. This agreement is a lifeline for Egypt, providing a stable source of energy to meet its growing demands.
Israel's Role: A Delicate Balance
Prime Minister Benjamin Netanyahu has been pushing for the approval of this deal, aiming to finalize it before his meeting with US President Donald Trump. The Israeli government's decision is not just about energy exports; it's a strategic move with potential implications for regional politics and US-Israel relations.
The Leviathan partners, including NewMed Energy, Chevron, and Ratio Petroleum Energy, have agreed to prioritize the Israeli economy, ensuring a guaranteed price and supply for domestic needs. This step is a revival of the gas outline agreement from a decade ago, a move that could stabilize Israel's energy market.
Controversy and Delays: Qatar's Involvement
But here's where it gets controversial: Qatar, sensing an opportunity, tried to intervene. As revealed by "Globes," Qatar sought to convince Egypt to buy liquefied natural gas (LNG) from them instead. The reason? Qatar's leader, Emir Tamim al-Thani, is a senior member of the Muslim Brotherhood, a group that poses a threat to Egyptian President Abdel Fattah al-Sisi's domestic stability.
Instead, Egypt turned to a $4 billion LNG agreement with Hartree Partners, a US merchant commodities firm. However, this agreement falls short of the 130 BCM promised by the Leviathan partners, constituting only about 13% of Israel's total gas capacity.
The delay in Israeli approval, initially expected within two months, was due to new demands from the Ministry of Energy. The Leviathan partners were asked to extend exports beyond 2040 and sell to the Israeli economy at a lower price than previously agreed.
US Involvement: Chevron's Commitment
Senior Washington officials have been actively involved in ensuring the deal's success, particularly regarding Chevron's commitment. With significant assets in the US, Kazakhstan, and Australia, there were suggestions that Chevron might redirect its investment. However, the US administration's backing for Chevron has been crucial in keeping the deal on track.
US Ambassador to Jerusalem, Mike Huckabee, and Energy Secretary Chris Wright have played key roles, with Wright even canceling his visit to Israel for the signing ceremony due to the deal's initial refusal.
The Impact: A Game-Changer for Leviathan
The export deal will finance two major infrastructure projects in the Leviathan field. The first is a pipeline from the field to the production platform, increasing annual production from 12 to 14 BCM. The second is the connection of the Ashkelon-Ashdod transmission line, boosting transmission capacity to Egypt by 2 BCM. In the long term, this deal will enable the expansion of production capacities to 21-23 BCM per year, doubling last year's production rate.
This agreement is a game-changer for the Leviathan partners, providing the financial backing to develop the field's full potential.
As we await responses from the Prime Minister's Office and the Ministry of Energy and Infrastructure, the question remains: Is this deal a win-win for all parties involved, or does it raise more concerns than it solves? What are your thoughts on this complex energy agreement? Feel free to share your opinions in the comments below!
