Israel approves historic $35bn gas deal with Egypt

Prime Minister Benjamin Netanyahu has greenlit a landmark energy agreement that will see Israel export natural gas valued at approximately $35 billion to Egypt.

The deal, described by officials as the largest in the nation's history, involves the supply of up to 130 billion cubic metres (bcm) of natural gas from the offshore Leviathan field.

It comes at a pivotal moment for Cairo, which is grappling with frequent power cuts and declining domestic production, and serves to bolster diplomatic and economic ties between the two neighbours despite ongoing regional instability.

Speaking after approving the deal, Israeli Prime Minister Benjamin Netanyahu said that the contract matters for Israel’s strategic and security interests.

"This deal is with the American company Chevron, which has Israeli partners, and they will supply gas to Egypt. I approved the deal after securing our vital security and other interests, which I will not detail here." Netanyahu said.

This deal greatly strengthens Israel's position as a regional energy power, and it contributes to stability in our region." he added.

The agreement arrives as Egypt, once a hopeful hub for liquified natural gas (LNG) exports to Europe, has seen its own output from the Zohr field decline faster than anticipated.

This has forced the populous Arab nation to curb exports and implement rolling blackouts to manage domestic demand.

For Israel, the deal secures a long-term revenue stream, with an estimated $18 billion expected to flow directly into state coffers to fund education, health, and security infrastructure.

The approval follows months of reported delays linked to security concerns in the Sinai Peninsula and broader tensions surrounding the conflict in Gaza.

Analysts indicate that the finalisation of the contract shows a reset, where energy interdependence is being used to stabilise the often fragile peace between the two nations.

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Chevron, the US energy giant operating the Leviathan field alongside Israeli partners NewMed Energy and Ratio Energies, will oversee the expanded flows. 

The deal extends supply commitments through 2040, ensuring that Israeli gas remains a cornerstone of Egypt's energy mix for the next decade and beyond.

Netanyahu, making a festive allusion to the concurrent Hanukkah holiday, noted that the deal brings "another jug of oil" to Israel, one that will sustain the economy for years to come.

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