Israel’s long-delayed $35 billion natural gas export agreement with Egypt is close to receiving approval after significant progress in negotiations between the Energy Ministry and the companies operating the country’s offshore fields.
Officials familiar with the talks say the government will authorize the exports once producers commit to reducing the price of gas sold to Israel’s domestic market. The new pricing formula would be linked directly to the terms defined in the export contract, helping stabilize electricity costs for Israeli consumers.
The agreement, originally signed in August, was frozen by Energy Minister Eli Cohen, who insisted that exports could not proceed until Israel secured a fairer price at home. With the new commercial framework nearly finalized, that condition now appears to be met.
The suspension had drawn frustration from both Cairo and Washington. U.S. Energy Secretary Chris Wright even canceled a planned November visit to Israel over the stalled permit, as the White House sees the Israel–Egypt energy partnership as strategically important. Diplomatic pressure from President Donald Trump also played a role in pushing the deal toward completion.
If approved, the new pricing model will benefit private electricity producers—such as Reindeer (Generation Fund), OPC Hadera, and Dorad—who have not yet secured long-term gas supply contracts. Cheaper fuel costs are expected to ease electricity rates or at least prevent further increases. Producers will earn less from domestic sales but will gain stable export revenues, meaning exports effectively subsidize cheaper Israeli prices.
Israel’s gas sector has been unsettled in recent months. Large export commitments by the Leviathan and Energean fields left the Tamar field as the main supplier for the Israeli market. This imbalance contributed to the collapse of Tamar’s major contract with the Israel Electric Corporation, raising concerns that local consumers would face significantly higher prices in the future. The government’s freeze on exports was partly a response to that situation.
Egypt, which urgently needs gas for its power sector, has grown impatient with the holdup. An Egyptian official warned that Cairo has alternatives, including LNG imports from Qatar or the U.S. Although more expensive, Qatar has been quick to position itself as a replacement supplier during the Israeli delay. This pressure, combined with U.S. involvement, has accelerated efforts to close the remaining gaps in the agreement.
The draft now being shaped reportedly includes safeguards to ensure Israel’s domestic needs are protected if offshore reserves prove smaller than expected. However, it remains unclear how long price controls will remain in place or how the arrangement will affect the future of the Tamar–IEC contract. The Energy Ministry confirmed that talks are ongoing, saying the goal is to balance Israel’s supply requirements with regional export opportunities. Minister Cohen has declined further comment.
The agreement is expected to be signed within days, signaling a major step forward for both Israel’s gas industry and its regional energy cooperation with Egypt.
