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Israel's Leviathan signs a $35 billion natural gas deal with Egypt

NewMed, a partner in the Leviathan field, announced on Thursday that Israel's Leviathan gas field had signed the largest gas export agreement in Israel's history. The deal is worth up to 35 billion dollars and will supply gas to Egypt.

Leviathan will sell gas to Egypt for about 130 billion cubic meters (bcm) until 2040 or until the full contract quantity is met.

After production started in 2020, the Leviathan reservoir began to supply Egypt. The initial contract was signed in 2019 and is for 60 bcm, or 4.5 billion cubic meters per year. It will be supplied to Egypt by early 2030s.

NewMed reported that Leviathan has already provided 23.5 bcm (billion cubic meters) of gas to Egypt from 2020.

NewMed CEO Yossi Abd said that the deal was the largest export agreement ever to occur in the eastern Mediterranean and strengthened Egypt's role as the major hub in the area.

This deal, which was made possible through our strong regional partnerships will open up new regional export opportunities. It is a further proof that the natural gas industry and the broader energy sector can act as a pillar for collaboration. Egypt, the largest Arab country, has experienced rolling blackouts for the past two years due to the government's financial strain and the lack of natural gas.

It has abandoned its plans to be a hub for supplying Europe, and is now a net gas importer. In recent months it signed agreements with energy companies and trading houses in order to purchase 150-160 cargoes liquefied gas. Exports from Leviathan ceased during a 12-day conflict between Israel and Iran, in June.

In the first phase of the agreement, Leviathan will provide Egypt with 20 billion cubic meters of gas beginning in early 2026 following the connection of new pipelines.

NewMed stated that it will export the 110 bcm remaining in a second stage, which will begin following the completion of the Leviathan project expansion and construction of a transmission pipeline from Israel via Nitzana to Egypt.

Leviathan's growth, the company said, would allow it to produce and supply goods within Israel as well as to its neighbours until 2064. (Reporting and editing by Kevin Liffey, Barbara Lewis and Steven Scheer)

(source: Reuters)