On 7 August 2025, the partners in Israel’s Leviathan gas field announced an agreement to supply approximately 130 billion additional cubic metres of natural gas to Egypt, with projected revenue of around $35 billion. Deliveries would extend to 2040, or until the contracted quantities were supplied.
Described by the sellers as Israel’s largest export deal, the agreement deepens an energy relationship shaped by both commercial interests and acute political tension. The amendment was signed with Blue Ocean Energy, an existing buyer of Leviathan gas for the Egyptian market.
Israeli Energy Minister Eli Cohen emphasised its political and security significance as well as the economic gains. He portrayed gas exports as strengthening Israel’s regional position and generating revenue and employment.
For Egypt, declining domestic output has created an expensive import requirement and contributed to electricity shortages. Pipeline gas can cost less than liquefied natural gas, which must be cooled, shipped and regasified. Yet increased reliance on a neighbouring supplier also raises questions about vulnerability to political disputes and interruptions.
Political opposition, economic dependence
The announcement came amid severe strain over Israel’s war in Gaza. Cairo has opposed the forced displacement of Palestinians and warned against military developments affecting its border with the enclave and Sinai. Public pressure within Egypt has called for restricting or ending cooperation with Israel, particularly economic ties.
The 1979 peace treaty has sustained state relations without producing broad popular acceptance. Cooperation on security and energy has often proceeded more quietly than the disagreements aired in public.
The scale of the new agreement sharpens that contrast. As Egypt criticises Israeli military operations and the two governments disagree on regional questions, their energy relationship is becoming more substantial. Supporters see pragmatic cooperation; critics see an expanding constraint on Egypt’s political choices.
What the agreement actually covers
NewMed’s 7 August disclosure describes an amendment to the Leviathan export contract with Blue Ocean Energy, adding approximately 130 billion cubic metres in two tranches. The roughly $35 billion figure is estimated revenue for the field’s partners over the delivery period, not an immediate payment by Egypt.
The first tranche covers approximately 20 billion cubic metres, with annual deliveries expected to rise by around two billion cubic metres after production and transport works are completed. A second tranche of around 110 billion cubic metres is linked to Leviathan’s expansion and additional pipeline capacity, eventually bringing annual sales to Egypt to approximately twelve billion cubic metres.
The timetable depends on infrastructure, approvals and investment conditions. These are contracted future quantities, not gas available immediately on signature. The pricing formula is linked principally to Brent crude.
The amendment concerns Leviathan. It should not be confused with separate Tamar arrangements or earlier discussions about smaller annual increases. Leviathan’s existing contract covered approximately sixty billion cubic metres, and physical exports to Egypt began in January 2020.
The economic rationale is Egypt’s widening supply gap. Declining field output, investment pressures and growing demand have undermined the earlier prospect of sustained self-sufficiency and forced greater reliance on imports. Power cuts in the summer of 2024 made that shortfall visible to households and businesses.
The Egyptian side had not set out detailed contractual terms in the material available for this report at the time of writing. Public discussion was therefore driven largely by the sellers’ announcement and reporting on the agreement.
Egypt remains important to Israel’s regional export strategy because it combines a large domestic market with the Idku and Damietta liquefaction plants. But the ability to liquefy gas is distinct from having surplus supplies available for profitable re-export.
Who benefits?
Sara Kira, director of the European–North African Center for Research, told Zawia3 that Egypt approaches gas pragmatically, prioritising national and public interests. She acknowledged that agreements with Israel raise questions among Egyptians about the scale and nature of cooperation.
She sees maritime arrangements and regional coordination as central to Egypt’s effort to benefit from Eastern Mediterranean discoveries, including Israel’s Tamar and Leviathan and Egypt’s Zohr.
Kira said Egypt’s development plans account for supplies from across the region, not only domestic fields. She highlighted the Cairo-based East Mediterranean Gas Forum, whose members include Egypt, Israel, Cyprus, Greece, Italy, France, Jordan and Palestine.
In her view, regional coordination has supported pipelines and liquefaction infrastructure, allowing Egypt to process gas for export and earn foreign currency. She cited the 2022 memorandum involving Egypt, Israel and the European Union as part of that strategy, followed by the major Leviathan expansion agreement announced in August 2025.
Kira expects the agreement to increase annual Leviathan deliveries from roughly 4.5 billion cubic metres towards twelve billion, with the larger volumes dependent on expansion works. The 2029 target discussed at the time should be understood as a projection rather than a completed increase.
She argues that integrated infrastructure benefits both countries, while acknowledging that it also makes their energy ties sensitive to political and security developments.
Kira also claimed that prior maritime delimitation with Israel had helped Egypt avoid disputes. That assertion requires clarification: Egypt’s documented Mediterranean delimitation agreements with Cyprus and Greece are not evidence of a separate Egyptian–Israeli agreement. No such document was supplied with her comments.
She considers Egypt’s existing LNG facilities an advantage for investment and operations. Israel, she said, gains access to a large regional market and potential export routes through Egyptian plants without first building its own liquefaction capacity.
Kira believes lower-cost pipeline purchases and subsequent processing can generate a profitable margin and support foreign-currency earnings. That is her assessment of the opportunity, rather than a guaranteed outcome: domestic demand, gas prices, processing costs and available export volumes determine whether re-export is viable.
A strategic constraint?
Economist Zohdi El-Shami, chair of the Socialist Popular Alliance Party’s board of trustees, takes a sharply different view. He described the deal to Zawia3 as another strategic disaster and a long-term constraint on Egypt’s energy decisions.
He argued that the government should have learned from earlier import agreements, initially valued at around $15 billion and subsequently expanded, and should instead have prioritised investment in Egyptian fields and self-sufficiency.
El-Shami also questioned the maritime basis of Israeli field ownership, suggesting that some gas could belong to Egypt. Geographical proximity alone, however, does not establish sovereign rights over a reservoir, and he supplied no geological or legal evidence demonstrating that the fields contain Egyptian gas.
His central economic criticism concerns how imported gas is used. Authorities had promoted earlier agreements as an opportunity to liquefy supplies at Idku and Damietta and re-export them at a profit. In practice, he said, much of the gas was needed domestically to offset declining production.
El-Shami argues that greater dependence on Israeli supply limits Cairo’s ability to take a firm political stance against Israeli military actions. A supplier able to interrupt a significant flow of fuel, he warned, can acquire leverage in a crisis.
“Why should we deepen dependence instead of looking for alternatives?” — Zohdi El-Shami
He described the agreement as more than a commercial transaction: in his assessment, it alters the balance of power by making Israel an unavoidable partner in Egypt’s energy equation. Extending that relationship towards 2040, he argued, risks subordinating part of Egypt’s energy security to another country’s decisions.
He called the policy a grave offence against Egypt’s national interest and warned that Egyptians could bear its consequences for decades. His criticism frames the dispute as one of national strategy, not simply the price of a unit of gas.
How the regional gas map changed
The discovery of Zohr in 2015 encouraged expectations that Egypt would become a major regional energy power. Production began in December 2017, helping Egypt end LNG imports in 2018 and revive exports.
Egypt’s liquefaction facilities also offered neighbouring producers a route to international markets. Agreements signed in 2018 and amended in 2019 underpinned Israeli deliveries from 2020, reversing the direction of an earlier relationship in which Egypt had exported gas to Israel.
By 2023, declining output and rising domestic demand were eroding Egypt’s surplus. Mature fields require continuing investment to offset natural decline; population growth and energy-intensive industry increase the pressure on supplies.
The original report cites a fall in production from approximately 35.5 billion cubic metres in January–July 2023 to 30.19 billion in the same months of 2024, roughly fifteen percent. It also cites full-year estimates of 59.29 billion cubic metres in 2023 and 49.37 billion in 2024, a decline of about seventeen percent. These are distinct reporting periods, and the July 2024 link originally attached to the annual figures cannot by itself substantiate a full-year 2024 total.
Daily figures quoted in energy reporting likewise vary by date: estimates of output around 4.6–5 billion cubic feet a day and demand around 6.2–6.8 billion are not a single contemporaneous balance sheet. They nevertheless describe the same structural difficulty: domestic supply falling short of requirements.
Not all development projects were still awaiting start-up. Contrary to the original description of Raven as a field expected to come online after 2025, BP announced its second development phase on 16 February 2025. The field itself had been producing since early 2021.
The report also cites LNG imports of approximately 2.8 million tonnes in 2024 and exports falling to around 0.54 million tonnes, illustrating the reversal in Egypt’s trading position. Its quoted merchandise-trade figure of $2.13 billion in Israeli petroleum-gas exports to Egypt in 2023 concerns a trade category and value, not a direct physical measure of natural-gas dependence.
Gas is central to electricity generation and industrial production, so a supply shortfall extends beyond the energy sector. Additional pipeline imports can ease immediate pressure and reduce reliance on expensive LNG cargoes, but cannot alone resolve declining domestic production or eliminate supply risks.
The new agreement therefore exposes a profound reversal: Egypt’s ambition to act as a regional processing and export hub now coexists with an urgent need to import fuel for its own economy. Whether the deal is viewed as pragmatic relief or a strategic constraint depends on what weight is given to short-term costs, long-term diversification and the political risks of dependence.
