Israel Halts Largest Gas Deal with Egypt, Defies US Pressure

 

Israel Halts Largest Gas Deal with Egypt, Defies US Pressure

Israel gas deal, Egypt gas agreement - Israel is currently hesitant to go ahead with the largest gas deal it has ever inked with the North African country of Egypt.

Israel's Energy and Infrastructure Minister Eli Cohen made this known, stating that until Israel’s interests are adequately protected and equitable prices secured, the deal will not be signed.

“As a member of the cabinet, I will not approve the deal before ensuring that Israel’s security interests are protected and that a fair and competitive price is guaranteed for Israeli citizens,” the minister said in an interview with a local TV station, as seen on Egypt Independent.

Refusing to elaborate, the minister noted that the deal is much more than just a fiscal play; it also has political and security connotations.

Speaking further on what the deal would entail for the country, he explained that the agreement protects the shekel, boosts the economy, and promotes stability, but must be used carefully in the political and security domains.

While Israel maintains a hesitant stance, the United States appears to be pressing for the deal's swift conclusion, according to the minister.

Considering that the deal is the largest of its kind, with a worth of US$35 billion, the US had pushed for it to be completed before US Energy Secretary Chris Wright made his visit to Israel.

However, the Israeli minister noted that his stance would not be altered by any external influence, despite the US and Israel having a very beneficial and cordial relationship.

In response, the US Energy Secretary canceled his intended six-day trip to Israel.

Gas deal between Israel and Egypt

Israel and Egypt signed a historic $35 billion natural gas agreement back in August.

The agreement was signed between Israel’s Leviathan partners, led by NewMed Energy, and the US company Chevron.

According to the agreement, Leviathan, which is located off the Mediterranean coast of Israel and has reserves of around 600 billion cubic meters, would sell Egypt roughly 130 billion cubic meters of gas until 2040, or until all of the agreed-upon quantities are met.

This agreement not only solidifies Israel's position as a major energy exporter but also supports Egypt's ambitions to become a key regional energy hub.

The agreement will allow Egypt to grow its LNG exports while also meeting rising local demand in the face of chronic electrical shortages.

To make this possible, both countries intend to enhance infrastructure, including a new cross-border pipeline through Nitzana and capacity upgrades to Leviathan.

For security considerations, Leviathan's exports were suspended during the 12-day war between Iran and Israel in June, but they have since resumed, as seen on Reuters.

Phase one will produce approximately 20 billion cubic meters by 2026, with continuous additions until 2040.

Source: africa.businessinsider.com