Israel has completed a new subsea natural gas pipeline that will increase exports to Egypt, marking a significant step in the implementation of a long-term gas supply agreement valued at about $35 billion.
The 45-kilometre offshore pipeline links Ashdod and Ashkelon, connecting the Leviathan gas processing facilities to the East Mediterranean Gas pipeline, which delivers gas to Egypt through El-Arish. The new infrastructure removes a key transport bottleneck and allows greater volumes of gas to reach the Egyptian market.
With the pipeline now operational, export capacity along the route is expected to rise from roughly 6.5 billion cubic metres (bcm) per year to 8.5 bcm annually. This will enable the Leviathan partners—Chevron, NewMed Energy and Ratio Energies—to increase supplies to Egypt’s Blue Ocean Energy under their existing export agreement.
The expansion is part of a broader development programme at the Leviathan gas field. A third pipeline has already been added between the offshore reservoir and its production platform, while plans are underway to further raise output. By 2029, annual production from the field is expected to reach around 21 bcm, allowing exports to Egypt to increase even further in the coming years.
For Egypt, the additional gas supplies come at a crucial time. Falling domestic production and rising demand from electricity generation, industry and households have forced the country to rely more heavily on costly liquefied natural gas (LNG) imports. Pipeline gas from Israel offers a more affordable and faster alternative.
Despite ongoing political tensions, including disagreements over the conflict in Gaza, Egyptian authorities have maintained that the gas arrangement is a commercial agreement negotiated by private energy companies rather than a political endorsement of Israel. The deal enables Egypt to strengthen its energy security while keeping its diplomatic positions separate from its economic interests.
The importance of Israeli gas became evident during supply disruptions in 2025, when regional conflict temporarily reduced exports. The shortages forced some Egyptian fertiliser plants to halt production, increased the country’s dependence on fuel oil for electricity generation and prompted emergency LNG purchases.
Although the expanded partnership improves Egypt’s energy outlook, it also highlights the risks of relying heavily on a single external supplier. Any future regional instability could interrupt supplies and increase Egypt’s import costs.
Energy cooperation has nevertheless remained one of the strongest areas of collaboration between the two neighbours. While Israel secures a major export market for its natural gas, Egypt benefits from reliable supplies and can process part of the imported gas at its LNG terminals for possible re-export, supporting its ambition to become a regional energy hub.
