Israel approves $34 billion natural gas deal with Egypt

Israeli Prime Minister Benjamin Netanyahu announced Wednesday the approval of the country’s largest-ever natural gas export agreement—a deal worth 112 billion shekels ($34.5 billion) that will send fuel to Egypt through 2040.

The agreement with US energy company Chevron and Israeli partners is expected to generate about 58 billion shekels ($17.9 billion) in state revenue through taxes and royalties, with funds designated for education, health, infrastructure and security. The deal also includes more than 16 billion shekels ($4.9 billion) in direct infrastructure investment.

A deal that "contributes to stability in our region"

“This deal greatly strengthens Israel’s status as a regional energy power and contributes to stability in our region. It encourages other companies to invest in gas exploration in Israel’s economic waters,” Netanyahu said alongside Energy and Infrastructure Minister Eli Cohen following the approval. “More gas will be found, but first and foremost, this deal obligates the companies to sell gas at a good price to you—the citizens of Israel.”

Revenue will start modestly, at about half a billion shekels ($154 million) annually during the first four years as companies expand pipeline infrastructure, then rise to about 6 billion shekels ($1.9 billion) per year, according to Netanyahu’s office.

Mechanisms to prioritize supply and improve gas pricing

Cohen called the agreement a historic moment that establishes Israel as a regional energy power. The approval includes mechanisms to prioritize supply and improve gas pricing for the local market.

“Natural gas is a strategic asset for the state. Prime Minister, you resolutely led the Gas Framework exactly a decade ago, and today we are reaping the fruits,” Cohen said. “We will continue to work toward bringing in additional local and international companies to invest in Israel to increase reserves for the local market and export.”

© JNS