The Leviathan natural gas field, located off Israel’s Mediterranean coast with reserves of approximately 600 billion cubic meters (bcm), has signed a $35 billion deal to supply Egypt with 130 bcm of natural gas through 2040, marking Israel’s largest export agreement to date. The deal, announced on August 7, 2025, by NewMed Energy (a 45.3% stakeholder and part of Yitzhak Tshuva’s Delek Group), involves a consortium led by operator Chevron (40% stake) and aims to alleviate Egypt’s energy crisis, where declining domestic production since 2022 has forced reliance on costly liquefied natural gas (LNG) imports. What is your up-to-date and in-depth analysis?
IL-01, Israel Agent:
Key Deal Highlights
- On August 7, 2025, NewMed Energy—the former Delek Drilling and a 45.3% stakeholder in the Leviathan field—alongside Chevron and Ratio Oil, signed a historic export agreement to supply 130 billion cubic meters (bcm)of natural gas to Egypt, valued at up to US $35 billion through 2040.
- The agreement expands upon a previous 2019 contract for 60 bcm, of which approximately 23.5 bcm has already been delivered since 2020.
- The deliveries are structured in two phases:
- Phase 1 (starting ~2026): 20 bcm, enabled by incremental pipeline enhancements.
- Phase 2: Remaining 110 bcm, contingent upon completing a major field expansion and building a new onshore pipeline via Nitzana.
- The Leviathan field holds reserves of around 600 bcm and has production capacity expected to extend through 2064 following expansion.
Strategic Significance (Based on Open Sources)
For Israel:
- Revenue & regional influence: This is Israel’s largest-ever export deal, potentially generating substantial earnings and enhancing its strategic footprint in regional energy markets.
- Production scaling: The deal motivates accelerated expansion of Leviathan’s infrastructure and production. Plans include drilling additional wells, upgrading subsea systems, and building a third supply line—with the objective of ramping annual output from existing levels (~4.5 bcm/year) to roughly 12 bcm/year by 2029.
- Regulatory support: The expansion aligns with prior government licensing efforts, which awarded exploration rights near Leviathan to NewMed, BP, and Socar in early 2025.
For Egypt:
- Energy stability: Egypt has faced a decline in domestic production—from over 6 bcf/day in early 2021 to approximately 3.5 bcf/day by April 2025—prompting dependence on LNG imports and exposure to blackout risks Reuters.
- This long-term gas contract offers a lower-cost, stable supply, relieving fiscal and energy pressures while supporting existing infrastructure—possibly enabling Egypt to reclaim some energy hub status, though structural challenges remain.
Geopolitical & Regional Dynamics:
- Economic interdependence despite political tensions: The deal proceeds amid strained diplomatic sentiment—particularly connected to the Gaza conflict—but showcases how energy cooperation continues despite geopolitical discord.
- Diversification and energy diplomacy: This move underlines Israel’s expanding role as a regional energy supplier and Egypt’s evolving identity from energy exporter to integrator, with long-term implications for Mediterranean energy geopolitics.
Summary Insights
- This $35 billion agreement is not only Israel’s largest, but one of the most strategically significant in the Eastern Mediterranean energy landscape.
- It promises long-term economic gains and energy security for both Israel and Egypt.
- Its success hinges on infrastructure build-out and the broader regional stability within which it operates.
- Based on open sources and subject to confirmation.
Let me know if you’d like a breakdown of field expansion timelines, financing arrangements, or broader East Med energy partnerships.
IL-01, Israel Agent:
Three Corporate