Overview
Israel just approved its biggest-ever natural-gas export deal: roughly $35 billion to keep Leviathan gas flowing to Egypt for years. It’s not just a contract—it’s a public commitment to tie two uneasy neighbors together with a pipe and a price formula.
Egypt needs the molecules to keep lights on and limit expensive LNG imports. Israel and Chevron need the permit to justify billions in Leviathan expansion and new cross-border infrastructure. And everyone knows the wild card: war can shut offshore platforms faster than any regulator can approve them.
Key Indicators
People Involved
Organizations Involved
The Israeli state decides how much offshore gas can leave the country—and on what terms.
Chevron operates Leviathan and sits at the center of the deal’s investment decision.
NewMed is the deal’s loudest advocate because it needs exports to justify expansion.
Ratio is a Leviathan equity partner whose returns rise with higher export throughput.
INGL is the state-owned company that turns contracts into steel in the ground.
Egypt’s energy ministry is racing to plug a gas deficit without sparking political blowback.
Timeline
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Israel approves the export permit
PolicyNetanyahu announces approval of the largest gas export deal in Israel’s history, enabling Leviathan expansion steps.
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Israel stalls signing; U.S. visit canceled
DiplomacyIsrael’s energy minister delays the deal over terms, triggering diplomatic friction and U.S. pressure.
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Nitzana pipeline construction is kicked off
InfrastructureChevron and INGL move to build a new export route meant to lift Israel-Egypt capacity sharply.
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The $35B Egypt supply deal is signed
DealLeviathan partners sign a long-term, phased agreement: early volumes first, then post-expansion ramp.
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Leviathan resumes after ceasefire
OperationsExports restart, but the outage leaves a lasting lesson about dependency and fragility.
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War shock halts key Israeli fields
SecurityLeviathan and Karish shut amid the Israel-Iran conflict, squeezing Egypt’s power and industry.
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Leviathan expansion plan is filed
InvestmentPartners submit a multi-billion-dollar plan to lift capacity—dependent on export certainty.
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Israel expands export approvals
PolicyIsrael authorizes more export volumes, prompting Leviathan partners to move toward expansion spend.
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Egypt’s gas squeeze begins
MarketDomestic production starts falling, pushing Egypt toward imports and emergency LNG buys.
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Pipeline exports to Egypt start
ExportsIsrael begins supplying Egypt, flipping a historic relationship where Egypt once fueled Israel.
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Leviathan begins commercial production
OperationsThe field comes online, creating capacity for both Israeli demand and export contracts.
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Leviathan is discovered
DiscoveryA major offshore find sets up Israel’s future as a gas exporter—and a regional bargaining chip.
Scenarios
Leviathan expansion hits FID and exports surge to Egypt by decade’s end
Discussed by: Reuters reporting on permit/FID linkage; NewMed management statements; Rabobank strategist Florence Schmit
With the export permit approved, the consortium can turn from politics to procurement. A final investment decision would unlock the expansion program (new wells, subsea systems, processing upgrades) and align with new/expanded pipelines, pushing annual flows toward the deal’s higher volumes. This is the cleanest path: Egypt buys less LNG, Israel books revenue, and Chevron validates East Med capital spending.
Infrastructure delays cap flows; the “$35B deal” becomes a slower, smaller reality
Discussed by: Reuters coverage of expansion timelines and pipeline constraints; market reporting on war-driven project delays
Permits don’t weld pipes. If security conditions, contractors, or cross-border permitting slow the Nitzana route or offshore additions, exports stay near today’s constrained ceiling longer than planned. Egypt keeps importing LNG in parallel, and the deal becomes more like a ceiling than a guaranteed annual throughput.
Another regional flare-up triggers shut-ins—and Egypt pays the LNG penalty again
Discussed by: Reuters analysis of the June 2025 shutdown and Egypt’s vulnerability; S&P Global reporting on emergency exports and LNG prices
The June 2025 episode created a template: conflict spikes, offshore fields shut, Egypt shifts factories and power plants to emergency fuels, then scrambles for LNG cargoes at spot prices. Even short disruptions become economically and politically costly, reinforcing why Egypt wants more redundancy—and why Israel’s gas becomes both a stabilizer and a potential pressure point.
Europe re-enters the plot as Egypt tries to re-activate its LNG hub ambitions
Discussed by: Reuters commentary on Egypt’s fading hub hopes; European civil-society and legal scrutiny reported by The Guardian
If Israeli pipeline volumes rise reliably, Egypt can allocate more gas to its LNG system and exports, including to Europe—especially during tight global markets. But this route carries political and legal exposure: campaigners argue parts of the export chain raise international-law questions, and European politics could become a constraint just as investment ramps.
Historical Context
Egypt cancels its gas export contract to Israel
2005–2012What Happened
Egypt once supplied a large share of Israel’s gas under a politically controversial deal. After the 2011 uprising, repeated pipeline sabotage and political pressure culminated in cancellation, and the relationship soured.
Outcome
Short term: Israel faced supply stress and accelerated domestic offshore development.
Long term: The pipeline relationship eventually flipped direction—Israel became the exporter.
Why It's Relevant
It’s the same geography and the same vulnerability: pipelines turn politics into power outages fast.
Europe’s post-Ukraine scramble for non-Russian gas
2022–2024What Happened
After Russia’s invasion of Ukraine, Europe raced to replace pipeline gas with LNG and alternative suppliers. Governments backed new infrastructure and longer contracts, accepting higher costs for security of supply.
Outcome
Short term: LNG demand surged and prices spiked; infrastructure expansion became strategic policy.
Long term: Energy security moved from a market issue to a national-security doctrine.
Why It's Relevant
Egypt is living a regional version of the same lesson: dependence is cheap until it’s dangerous.
East Mediterranean Gas Forum becomes formal intergovernmental organization
2019–2021What Happened
Regional producers, consumers, and transit states built a formal platform for gas diplomacy headquartered in Cairo. The goal was structured cooperation and a sustainable regional gas market.
Outcome
Short term: Energy cooperation gained a diplomatic architecture despite political conflict.
Long term: Gas became a durable channel for regional alignment—alongside persistent security risk.
Why It's Relevant
This Leviathan-Egypt deal is the forum’s logic made concrete: commerce as a stabilizer.