Eyebrows raised as Egypt extends $35bn gas deal with Israel
Egypt’s decision to extend and widen a natural gas import agreement with Israel has triggered heated debate, with critics questioning who stands to gain most from what is now one of the biggest energy deals on a global scale, Asharq Al-Awsat reported on August 21st.
Earlier in August, Israeli firm NewMed Energy, a key partner in the Leviathan gas field, confirmed it had altered its supply arrangement with Egypt, extending it to the year 2040, for the deal, which is valued at up to $35 billion. Since 2020, Leviathan has already exported 23.5 billion cubic meters of gas to Egypt.
The move comes as Israel’s war in Gaza intensifies, placing Egypt under sharper scrutiny over its energy ties with Israel. Yet Cairo insists the deal is rooted in economics, not politics. “Egypt’s economic agreements, whether with Israel or others, are based on national interests and returns,” an Egyptian official told Asharq al-Awsat.
Prime Minister Mostafa Madbouly echoed that sentiment, stressing that the agreement merely modifies a 2019 contract. Energy expert Maher Aziz noted that both sides gain from “medium-term supplies through the Sinai pipeline,” arguing that it reflects pragmatism rather than dependence.
But on June 13th, Israeli natural gas fields were forced to shut down briefly due to security concerns, halting supplies to Egypt’s factories. That disruption underscored Egypt’s reliance on Israeli imports to keep its industrial sector afloat.
US-based academic, Ahmed Hassanein Abdel-Maqsoud said: “Egypt gets competitively priced gas, while Israel relies almost entirely on Egypt’s liquefaction facilities to reach European markets. That makes the deal indispensable for both.” However, the US-based economist, Mostafa Youssef, appeared to believe the Israel has the real advantage in the deal. Youssef said Israel attains international market access through Egypt’s liquefied natural gas (LNG) plants during a period of diplomatic alienation because of the Gaza war.
While, in May, Cairo was actively seeking new gas partnerships with Russia, Qatar, and Turkey amid strained ties with Israel over Gaza.
The new deal could bolster Egypt’s prospects of becoming a regional LNG hub while allowing Israel to enhance ties with global markets. Israeli Energy Minister Eli Cohen commended the deal, claiming it is proof of Israel’s “strategic role in regional stability.”
Asharq Al-Awsat, Maghrebi.org
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