In a landmark move for Middle Eastern energy and diplomacy, Israeli Prime Minister Benjamin Netanyahu announced the approval of a colossal natural gas export agreement with neighbouring Egypt. Valued at a staggering $35 billion, this deal stands as the most significant in Israel's history and is poised to reshape regional dynamics.
A Deal Forged in the Mediterranean
The agreement, unveiled by Netanyahu in a recorded video statement on Wednesday, involves the supply of Israeli natural gas to Egypt over an extensive 15-year period. The gas will be sourced from the Leviathan field and other reserves off Israel's Mediterranean coast and delivered by the American energy behemoth, Chevron, a key stakeholder in these offshore assets.
Netanyahu hailed the pact, stating it "greatly strengthens Israel's position as a regional energy power, and it contributes to stability in our region." Financially, the deal promises substantial benefits for Israel, with an estimated half of the proceeds destined for the state's coffers.
Mending Fences Amid Regional Tensions
This monumental commercial agreement arrives at a critical juncture in Israel-Egypt relations, which have been strained during the two-year war in the Gaza Strip. Egypt, which shares borders with both Israel and Gaza, has been a pivotal mediator in conflicts, including the U.S.-brokered ceasefire agreed upon in October. Simultaneously, Cairo has been a vocal critic of Israel's military offensive in Gaza, which has resulted in extensive Palestinian casualties and destruction.
The gas deal is widely viewed as a potential catalyst for repairing diplomatic and economic bridges. Notably, the announcement saw Israeli Energy Minister Eli Cohen, a Netanyahu ally who had previously stalled the deal over terms, standing alongside the Prime Minister in support of the final agreement. His earlier objections had even prompted U.S. Energy Secretary Chris Wright to cancel a trip to Israel in October.
As of now, the Egyptian government has not immediately confirmed Netanyahu's announcement. Israel's journey as a gas exporter began nearly a decade ago, following discoveries in the early 2000s, with initial exports going to Jordan and later to Egypt.
Parallel Boost for Israeli Defense Exports
In a separate but significant development for Israel's strategic exports, the country's defense ministry announced on Wednesday that German lawmakers have approved an expansion of a defense agreement for Israel's sophisticated Arrow 3 missile defense system. This expansion elevates the deal's value from $3.5 billion to $6.5 billion, marking it as the largest defense export deal in Israel's history. Germany's move to procure the system is part of its broader strategy to bolster air defenses against potential threats from Russia.
Together, these two mega-deals—one in energy and one in defense—underscore Israel's growing influence and export prowess in critical global sectors, while the gas pact specifically opens a new chapter in its complex relationship with Egypt.
