NewMed Energy, alongside partners in the Leviathan project, has signed an agreement for the sale of natural gas from the Leviathan reservoir to Egypt.
The contract, signed with Blue Ocean Energy, an existing customer of Leviathan, is valued at approximately $35bn (Dh128.54bn) and involves the transfer of around 130 billion cubic metres (bcm) or 4.59 trillion cubic feet of natural gas.
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This deal represents the most significant export transaction in Israel’s history and underscores the strategic importance of the Leviathan gas field since its discovery.
The gas sales to Egypt are projected to continue until 2040 or until the agreed quantities are fully supplied.
Production and export to Egypt began in January 2020, with current supplies totalling approximately 60bcm under contract, and an annual volume of 4.5bcm, plus additional spot sales.
NewMed Energy CEO Yossi Abu said: “This is the most strategically important export deal to ever occur in the eastern Mediterranean and strengthens Egypt’s position as the most significant hub in the region.
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By GlobalData“Since it begun production, Leviathan has brought many benefits both domestically and internationally, and the reservoir’s expansion has been NewMed’s key priority for years. This deal, made possible by our strong regional partnerships, will unlock further regional export opportunities, once again proving that natural gas and the wider energy industry can be an anchor for collaboration.”
The existing export agreement with Egypt, established in 2019, will be superseded by this new arrangement upon completion of the contracted 60bcm, expected in the early 2030s. To date, around 23.5bcm of natural gas has been sold from Leviathan to the Egyptian market.
The new deal is structured in two stages, with the first concerning the sale of 20bcm and the second the sale of an additional 110bcm.
The latter is contingent upon the completion of the Leviathan expansion project and the construction of a new pipeline to Egypt via Nitzana.
The first stage is set to commence in the first half of 2026, following the completion of a third pipeline to the production platform and the Ashdod-Ashkelon transmission pipeline, increasing annual sales to Egypt by 2bcm.
The second stage will begin after the Leviathan expansion project’s completion, which is expected to boost Israel’s natural gas production by 30% and increase the reservoir’s annual production capacity to approximately 21bcm.
Total gas exports for the second stage are estimated at 110bcm, with annual variations, culminating in a total annual quantity of roughly 12bcm from Leviathan to Egypt.
The pricing of the natural gas is primarily linked to Brent oil prices, and the total sale is expected to generate around $35bn in revenue for all partners involved in the reservoir.
The finalisation of this deal is a critical step towards the final investment decision for the Leviathan expansion project (phase 1B), which includes drilling additional wells, expanding subsea systems, upgrading processing facilities and potentially laying a fourth pipeline.
