Africa Secures Energy Link as Israel Approves US$35bn Gas Export Deal with Egypt

Israel has formally approved a long-delayed natural gas export agreement with Egypt, unlocking what officials describe as the largest export deal in Israel’s history and further integrating Africa into the evolving energy architecture of the Eastern Mediterranean.

The agreement, confirmed this week by Israeli Prime Minister Benjamin Netanyahu, commits natural gas from Israel’s Leviathan offshore field to Egypt over a 15-year period, reinforcing Egypt’s role as a regional gas hub while anchoring African-linked infrastructure more firmly into global energy supply chains.

Under the terms of the deal, Israel will supply approximately 130 billion cubic metres of natural gas to Egypt between now and 2040. Signed in August and valued at up to US$35 billion, the agreement ranks among the largest cross-border energy transactions in the Mediterranean. Gas will be sourced from the Leviathan field, jointly operated by Chevron, NewMed Energy and Ratio Petroleum Energy.

Final approval had been delayed in November after Israeli authorities raised concerns over domestic supply security and pricing stability. Those concerns were resolved through revised commercial terms that prioritise Israel’s domestic supply obligations before export volumes are delivered to Egypt.

Strategic Importance for Egypt and Africa

For Egypt, the agreement comes at a critical juncture. Rising domestic power demand, declining output from mature gas fields and pressure on foreign currency reserves have strained the energy system. Securing long-term gas inflows allows Cairo to stabilise electricity generation while supplying its liquefied natural gas (LNG) facilities, which export to Europe, Asia and increasingly African markets.

Egypt operates two LNG terminals, making it one of the few African countries with the infrastructure required to monetise regional gas resources at scale. The deal strengthens Egypt’s position as a transit, processing and export hub, rather than a standalone producer.

Beyond Egypt, the agreement carries wider African significance. As Europe diversifies away from Russian gas, LNG processed in Egypt using Israeli feedstock has become part of the global supply rebalancing. This reinforces North Africa’s role in global energy flows and highlights a model in which African energy security, export revenues and infrastructure development are increasingly tied to cross-border gas networks.

Infrastructure Expansion and Supply Outlook

Leviathan is one of the Mediterranean’s largest offshore gas discoveries, with estimated reserves of nearly 600 billion cubic metres. Production is expected to reach about 20 billion cubic metres annually by 2026, with further expansion planned through to 2040.

To support higher export volumes, Israel and Egypt are planning infrastructure upgrades, including expanded capacity at Leviathan and the development of a new cross-border pipeline via Nitzana.

Energy Transition and Sustainability Considerations

From a sustainability perspective, the deal underscores the continuing role of natural gas in Africa’s energy transition. While gas remains a fossil fuel, it is widely viewed as a transition fuel, replacing more carbon-intensive options such as diesel and fuel oil in power generation.

In Egypt, gas-fired plants already underpin the national grid, and additional supply could reduce emissions intensity while supporting industrial growth. At the same time, long-term contracts raise concerns about carbon lock-in as global systems shift toward renewables.

Egypt’s approach has been to use gas revenues to stabilise the economy while accelerating investment in renewable energy, particularly in projects such as the Benban Solar Park and the Gulf of Suez wind corridor.

A New Energy Dynamic

For Israel, the agreement consolidates its emergence as a major energy exporter with Africa as a key destination. Unlike earlier deals focused on Europe or immediate neighbours, the Egypt agreement embeds Israeli gas directly into African energy systems and export chains, deepening economic ties despite periodic political tensions.

As gas begins to flow under the revised terms, the deal will be closely watched across Africa. It illustrates how geopolitics, infrastructure and energy demand are converging to reshape supply routes linking the Mediterranean to African markets. Whether this model strengthens long-term resilience or slows deeper decarbonisation will depend on how revenues are reinvested and how rapidly renewable alternatives scale alongside gas.