In a significant development, Israel is poised to seal a $35 billion gas export deal with Egypt, a move that has sparked both excitement and controversy. This deal, valued at an estimated $35 billion, is expected to be approved amidst pressure from the Trump administration. Under the agreement, Israel will export a substantial 130 billion cubic meters of natural gas from the Leviathan gas field to Egypt, with partners Chevron Corp., NewMed Energy, and Ratio Petroleum Energy guaranteeing a set price for the domestic economy. Previously, Egyptian Prime Minister Mostafa Madbouly announced that the supply agreement was extended until 2040.
However, this deal has not been without its challenges. Relations between the two countries soured after the Israeli military ordered residents of Gaza City to evacuate in September. Last year, Egypt imported a record 981 million cubic feet per day of natural gas from Israel, marking an 18.2% year-over-year increase. Egypt imports up to 20% of its gas from Israel, and over the past couple of years, the African country has struggled to maintain its position as a regional natural gas supply and LNG export hub. 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 this 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. The lack of new discoveries and investment has also taken a toll, with few significant new gas fields discovered since Zohr in 2015. Furthermore, insufficient investment in exploration and development, partly due to the government's arrears owed to foreign oil companies, has hampered efforts to offset the natural decline of existing wells.
This deal, therefore, presents a unique opportunity for both countries to address their respective energy challenges. However, it also raises questions about the future of regional energy dynamics and the potential impact on the environment. As such, it is a development that will undoubtedly spark debate and discussion, with many wondering how it will shape the future of energy in the region.
