The deal displays Egypt’s determined want for gasoline attributable to 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 international market, it calls into query the North African nation’s aspiration to return to being an exporter of the gas.
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 accomplice within the mission, 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 subject already has a contract to ship round 4.5 billion cubic meters a 12 months to Egypt, which can rise in levels beginning subsequent 12 months and will attain as a lot as 12.5 billion cubic meters a 12 months by 2033. Egypt additionally bought 2.5 billion cubic meters final 12 months on the short-term market, a quantity that may differ from one 12 months to the following.
Egypt turned a web gasoline importer in 2024 and has since been shopping for up massive volumes of liquefied pure gasoline, doing offers for provides out to 2028. The extra Israeli flows might imply Cairo can import much less LNG sooner or later than it might in any other case have needed to do.
Importing LNG has additionally raised Egypt’s total prices as a result of the super-chilled gas prices greater than twice as a lot as pipeline gasoline from Israel.
“This can be a win-win for each side. It means super 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 gives safety of power provide for a lot of, a few years to return 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 warfare with Iran in June highlighted potential vulnerabilities within the provide route. The disruption compelled Cairo to halt provides to some industries together with fertilizer producers.
Below the brand new settlement, gasoline might be delivered to purchaser Blue Ocean Power over 14 years with funds decided by a formulation primarily based on the value of Brent crude oil.
Through the first part of the deal, set to take impact subsequent 12 months, 20 billion cubic meters of gasoline might be delivered to Egypt. The second part, totaling round 110 billion cubic meters, requires completion of the Leviathan growth mission 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%.
