Egypt is set to ramp up its imports of natural gas from Israel after both nations signed a record-breaking $35 billion supply agreement — the biggest in Israel’s energy history.

The deal, announced Thursday by Leviathan gas field partner NewMed Energy, will see Israel deliver 130 billion cubic meters of gas to Egypt between 2026 and 2040. Deliveries will start next year, rising in stages from the current 4.5 billion cubic meters annually to as much as 12.5 billion cubic meters by 2033.

Cairo, grappling with rising domestic demand and falling local production, has relied increasingly on liquefied natural gas (LNG) imports since becoming a net gas importer in 2024. The new pipeline agreement promises substantial cost savings, as Israeli pipeline gas is about half the price of LNG sourced on the spot market.

“This deal secures Egypt’s energy needs for years while cutting import costs by around 50%,” said NewMed CEO Yossi Abu, calling it a “win-win” for both nations.

The arrangement will unfold in two phases. The first, starting in 2026, will supply 20 billion cubic meters. The second phase, covering the remaining 110 billion cubic meters, depends on expanding Leviathan’s production and building a new pipeline through Nitzana.

The deal comes despite concerns over supply stability, after the June war with Iran briefly halted Israeli gas flows to Egypt, disrupting key industries. Still, the long-term contract is expected to strengthen Egypt’s energy security while boosting Israeli gas exports.

Following the announcement, NewMed’s shares surged over 6% in Tel Aviv, marking their strongest intraday rise since February.