NewMed Energy and the rest of the Leviathan reservoir partners on Thursday signed the largest gas export deal in Israel’s history, involving 130 BCM (billion cubic meters) worth an estimated $35 billion to be sold to Egypt through 2040.
NewMed Energy (previously known as “Delek Drilling”) holds 45.34% of the Leviathan reservoir, according to the company’s website. With 22.9 trillion cubic feet of recoverable gas, Leviathan is the largest gas reservoir in the Mediterranean.
“The agreement we signed today is the largest and most significant in the history of our natural gas sector, and one of the largest in the history of the country,” said Yossi Abu, CEO of NewMed Energy.
The deal will strengthen regional stability and Israeli energy security, he added.
Egypt will buy the gas through Texas-based Blue Ocean Energy, an independent company which distributes gas within Egypt.
The transaction will involve two increments, starting with 20 BCM followed by an additional 110 BCM (the deal is contingent on the completion of several pipeline expansions), according to a NewMed report released on Thursday.
Israeli business site Globes reported on Thursday that the agreement requires final approval of the Israeli Energy Ministry’s Commissioner of Petroleum Affairs, but “has already given approval in principle for a deal of up to 145 BCM, and NewMed is not afraid of regulatory difficulties at this stage.”
NewMed said the deal will allow the expansion of Leviathan’s production capacity to 21-24 BCM per year. In 2023 and 2024, the reservoir produced 11 BCM, according to the company’s website.
Half of that 11 BCM production went to Egypt and the rest was divided between Israel’s local economy and Jordan, Globes reported, adding that by 2035, the company hopes to export 60% of Leviathan’s gas and retain 40% for the local economy.
