The deal displays Egypt’s determined want for gasoline as a result of surging home demand and declining output from its personal fields. Whereas the multiyear contract provides decrease costs than these out there on the short-term world market, it calls into query the North African nation’s aspiration to return to being an exporter of the gasoline.
Leviathan’s operators signed an settlement to ship 130 billion cubic meters of gasoline to Egypt from 2026 to 2040, Israel’s NewMed Power LP, which is a companion within the venture, stated in an announcement on Thursday. The export deal is price about $35 billion, making it the most important in Israel’s historical past, it stated.
The gasoline area already has a contract to ship round 4.5 billion cubic meters a yr to Egypt, which can rise in phases beginning subsequent yr and will attain as a lot as 12.5 billion cubic meters a yr by 2033. Egypt additionally bought 2.5 billion cubic meters final yr on the short-term market, a quantity that may fluctuate from one yr to the following.
Egypt turned a web gasoline importer in 2024 and has since been shopping for up giant volumes of liquefied pure gasoline, doing offers for provides out to 2028. The extra Israeli flows could imply Cairo can import much less LNG sooner or later than it will in any other case have needed to do.
Importing LNG has additionally raised Egypt’s total prices as a result of the super-chilled gasoline prices greater than twice as a lot as pipeline gasoline from Israel.
“This can be a win-win for either side. It means large financial savings to the Egyptian market vis-a-vis LNG imports — it’s 50% down on the present LNG import market,” NewMed CEO Yossi Abu stated in an interview. “It offers safety of vitality provide for a lot of, a few years to come back to feed the expansion of the Egyptian economic system.”
Whereas Leviathan’s gasoline is cheaper, the interruption of flows from Israel to Egypt due to the battle with Iran in June highlighted doable vulnerabilities within the provide route. The disruption compelled Cairo to halt provides to some industries together with fertilizer producers.
Underneath the brand new settlement, gasoline can be delivered to purchaser Blue Ocean Power over 14 years with funds decided by a components primarily based on the value of Brent crude oil.
Through the first part of the deal, set to take impact subsequent yr, 20 billion cubic meters of gasoline can be delivered to Egypt. The second part, totaling round 110 billion cubic meters, requires completion of the Leviathan enlargement venture and the development of a brand new pipeline from Israel to Egypt through Nitzana.
Shares of NewMed rose as a lot as 6.4% in Tel Aviv, the steepest intraday achieve since Feb 4. NewMed holds a forty five.34% stake in Leviathan alongside Chevron Corp. with 39.66% and Ratio Energies LP with 15%.
