Khaberni - About 3 months ago, Tel Aviv welcomed the signing of an agreement to export quantities of natural gas to Egypt, which Israeli officials then described as their country's largest energy deal. However, this Israeli welcome turned into stubbornness in implementing the agreement shortly thereafter.
Between the seller, Israel, and the buyer, Egypt, a third party appeared within the deal, the United States, which pressures Tel Aviv to pass the stalled agreement.
The pressure from Washington recently involved the cancellation of a scheduled visit to Israel by U.S. Energy Secretary Chris Wright, as reported by Israeli newspapers citing government officials.
The American energy giant Chevron manages the Israeli Leviathan field, which was supposed to pump gas to Egypt according to the stalled agreement, thus they are a primary victim of the Tel Aviv's stance.
In August, New Med, one of the partners in the Israeli Leviathan field, announced an agreement to supply 130 billion cubic meters of natural gas to Egypt, valued at up to $35 billion.
From Welcome to Rejection
The Israeli Energy Minister commented on the signing of the agreement last August, saying: "Signing the largest gas deal in history is an important news from a security-political perspective as well as from an economic perspective, it cements our position as a leading regional power in the energy sector that our neighbors depend on and need, and it is also good news for the Israeli economy, as it will bring billions of dollars to the state's treasury, provide jobs, and boost the economy."
In early September, Israeli Prime Minister Benjamin Netanyahu instructed that the agreement not be completed without his direct approval.
The Israeli government justifies its stance with the local market, as reported by Hebrew newspapers citing the office of the Israeli Energy Minister, there are pending issues related to local pricing and what it called the national interests linked to fulfilling the country's energy needs fully.
The office of the Israeli Energy Minister mentioned that the administration of U.S. President Donald Trump exerted significant pressure on Tel Aviv to approve the agreement.
There is a political aspect to the crisis, suggested by Yedioth Ahronoth newspaper citing observers, as Tel Aviv uses energy as a political and security pressure tool by linking Cairo's commitment to the peace treaty signed between the two sides in 1979 to the continuation of Israeli gas supplies.
During the Israeli aggression on Gaza, Tel Aviv repeatedly complained to Washington about the cessation of the international forces led by the United States in monitoring the Egyptian military deployment in Sinai. Israeli officials also expressed their concerns about Cairo deploying forces and equipment in Sinai exceeding what is allowed by the peace treaty signed nearly 50 years ago.
What Do We Know About the Deal?
• The new deal is a modification of a previous agreement signed between Tel Aviv and Cairo in 2019, which stipulated that the first party sells only 60 billion cubic meters to the second party until 2030.
• The total that the Leviathan field, controlled by Israel, will pump to Egypt according to the new deal is about 130 billion cubic meters until 2040.
• Leviathan field's reserves are estimated at about 600 billion cubic meters of gas, making it the largest gas field in Israel, and Chevron U.S. owns a 40% stake and supervises the operations.
• The agreement includes two phases; the first starts with partial supplies in 2026, estimated to be about 20 billion cubic meters of gas followed by the second phase with about 110 billion cubic meters after the completion of expanding the connecting lines between the field and the liquefaction stations in Egypt.
• Cairo plans to use the Israeli supplies to cover part of the domestic demand, as well as re-export quantities in the form of liquefied natural gas.
Position of Cairo
With the exception of a single statement from the head of the General Authority for Information in Egypt, a body affiliated with the presidency, Cairo has not reacted to the Israeli stance regarding the deal.
The head of the General Information Authority, Zia Rashwan, described the Israeli stance during a televised interview as provocative with political motives, emphasizing Cairo's ability to deal with any economic or political ramifications from freezing or canceling the gas import agreement, clarifying that his country does not rely on a single energy source.
He continued, "There are alternative plans to face any challenges arising from the cancellation of the agreement, and the Israeli side will be the loser."
In July, the total flows in the national network of gases in Egypt reached 6.8 billion cubic feet per day, while the country's gas production is about 4.21 billion cubic feet per day.
Egypt experienced an unprecedented deficit between production and consumption in 2024, where consumption reached about 60 billion cubic meters compared to a production that did not exceed 47.5 billion cubic meters.
"Inadequate Justifications"
The Professor of Petroleum and Mining at the Faculty of Engineering, University of Cairo, and former head of the Petroleum Materials Division at the Federation of Chambers of Commerce, Dr. Hossam Arafat, says that Tel Aviv puts forward inadequate justifications for hindering the completion of the deal.
He added that the Israeli side claims Egypt gains huge benefits from the agreement by exporting the gas after liquefaction, noting Tel Aviv's disregard for the liquefaction and transport expenses to be borne by Cairo, according to Al Jazeera.
Israel does not own natural gas liquefaction stations while Egypt owns two stations in Idku and Damietta, which are responsible for liquefying the gas i.e., converting it from its gaseous state to a liquid state to facilitate its transport and storage.
He added, "Egypt will import the Israeli gas at $7.5 to $8 per million units and it is expected to re-sell it at a value of $13.5 to $14 thus the profit margin is slim considering the cost of transport and liquefaction."
He posed a rhetorical question, "What has changed in the pricing details within three months which is the age of the agreement? Did not Tel Aviv realize all the details before accepting the deal?"
The energy expert attributed the Israeli stance to the political developments in the region, explaining that Egypt's stance rejecting the displacement of the people of Gaza and its significant contribution to the ceasefire agreement led the Israeli government to try to steer the dispute towards a commercial direction.
Regarding the implications of not passing the agreement on both sides, the energy expert confirmed that Tel Aviv is the damaged party as it does not own liquefaction stations and therefore can only exploit the gas through exports via Egypt and Jordan or use it locally.
He continued, "As for Cairo, it is easily able to conclude foreign contracts and import gas from more than one source."
Regarding the U.S. position supporting the completion of the deal, the Professor of Petroleum and Mining said that Washington strives to protect the interests of the American company managing the Israeli gas field, adding, "Halting exports means daily losses for the American company."
According to the energy expert, America fully realizes that Israel is trying to hinder the deal for political reasons "and this will not happen and the agreement will pass because Tel Aviv has no alternatives," he predicted.
