Israel’s agreement to supply Egypt with 130 billion cubic meters of natural gas worth $35 billion through 2040 has been approved after pressure from Washington, with Egypt emphasizing the deal is “purely commercial,” according to Egypt’s State Information Service, adding that the deal was struck by private energy companies with zero government involvement.
Under the agreement, Chevron Corp. (NYSE:CVX), NewMed Energy (OTCPK:DKDRF)(TASE: NWMD) and Ratio Petroleum Energy (TASE: RTPT) will supply Egypt with natural gas from Israel’s Leviathan gas field, guaranteeing a set price for its economy.
Israeli Prime Minister Benjamin Netanyahu revealed on Wednesday that he has approved the $35 billion deal with Egypt, Israel’s biggest gas deal in history. Whereas the Egyptian government appears keen to avoid appearances of cozying up to a geopolitical rival following the two-year war in the Gaza Strip, observers have predicted that the agreement could help repair strained relations between the two countries.
The Leviathan gas field is a massive natural gas reservoir in the Eastern Mediterranean Sea, located approximately 130 km (81 miles) west of Haifa, Israel. Discovered in 2010, it is one of the world’s largest deep-water gas finds and has been a “game-changer” for Israel’s energy independence and regional foreign relations. Operated by Chevron (39.66% interest), with partners NewMed Energy (45.34%) and Ratio Energies (15%). Leviathan is estimated to hold approximately 600 billion cubic meters (bcm) of recoverable natural gas resources.
Over the past couple of years, Egypt has seen its ambitions to become a regional natural gas supply and LNG export hub go up in flames, with a series of setbacks turning the country from a net exporter of the vital commodity to an importer. Egypt’s natural gas production has experienced a significant and rapid decline in recent years, particularly since its peak in 2021 at around 6.6 bcf/d. Data from early 2025 indicated an eight-year low of below 5 billion cubic feet per day (bcf/d).
The main reason for the decline is the natural depletion of existing gas fields, including the massive Zohr field, which accounts for about 40% of Egypt’s total gas production. Production at Zohr has dropped by about a third since 2019. Lack of New Discoveries and Investment have also taken a toll, with few significant new gas fields discovered since Zohr in 2015.
By Alex Kimani for Oilprice.com
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