Egypt Saw Gas Trade With Israel Soar In 2023, As Economy Falters 

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by Tyler Durden
Wednesday, Mar 20, 2024 - 02:00 AM

Via The Cradle

Israel’s NewMed Energy reported on Tuesday that natural gas exports from the Leviathan field to Egypt increased by 28 percent in 2023. The company reports that the exports jumped from 4.9 billion cubic meters (BCM) in 2022 to 6.3 BCM in 2023. 

Israel Katz, former energy minister, approved the increase in exports to Egypt last year. For 2026, he projected an annual production increase of six BCM – about 60 percent over the current volume. "3.5 BCM of which will be directed in favor of Egypt," the report stated. 

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"The expansion of the total export quota to Egypt was increased by 38.7 BCM over 11 years," the Israeli Ministry of Energy’s August announcement read. "The export permit was granted under the comprehensive framework approved by government decisions … and in consultation with the Director of the Natural Gas Authority. In addition, an additional increase of 0.5 BCM per year is being considered."

The ministry noted that, in addition to enabling production expansion, the new exports are expected to derive billions of dollars in bonus revenues for Israel, increase energy ties with Egypt and other regional players, and strengthen Israel’s geopolitical status.

Furthermore, the report adds that "on December 14, 2023, the partners in the Tamar reservoir announced that the Ministry of Energy approved them to increase the export permit of the reservoir from 38.7 BCM … to 43 BCM. This amount will make it possible to increase the maximum amount of additional gas allowed for export to Egypt from 3.5 BCM per year to 4 BCM per year. As of the valuation date, no agreement has yet been signed. The export is subject to the aforementioned export permit."

NewMed reported that Leviathan’s partners, including Chevron, will invest $568 million to upgrade the field. In the latter half of 2025, annual production will increase from 12 BCM to 14 BCM. The company reported a fourth-quarter profit of $102 million, down significantly from $141 million the previous year.

Egypt–Israel tensions have been on the rise in recent months over Tel Aviv's plan to push Gazans into the Sinai Peninsula to continue with their plan of invading Rafah. 

Cairo has called on Washington, which has previously condemned the plan, to send a clear message to its regional ally not to move forward with the Rafah invasion. It says that "it is not enough to state opposition; it is also important to indicate what if that position is circumvented, what if that position is not respected."

However, following multiple investment deals into Egypt by other regional allies of Israel and a boost in the International Monetary Fund (IMF) loan to be granted to Egypt, the North African nation is constructing an "isolated security zone," something which local rights groups are calling Cairo's preparation for an influx of Palestinian refugees.