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Israel's Tamar offshore gas field
Image: picture-alliance/dpa/Albatross Aerial Photgraphy

Israel announces gas deal with Egypt

February 19, 2018

Past economic agreements with Israel have been controversial in Egypt, where support for the Palestinians runs high. But this major gas deal adds to growing strategic and diplomatic ties between the countries.


Israel has struck an "historic" multi-billion dollar gas deal with neighboring Egypt, Prime Minister Benjamin Netanyahu said Monday.

Israeli drilling company Delek Drilling and its US partner Noble Drilling announced Egyptian firm Dolphinus would buy around 64 billion cubic meters (2.26 trillion cubic feet) of gas over a decade. It is the largest export agreement for Israel's natural gas industry.

The $15 billion (12 billion) deal would "strengthen our security, economy and regional relations," Netanyahu said.

The gas would come from Israel's Tamar and Leviathan offshore gas fields. Tamar began production in 2013. Leviathan is scheduled to start producing by the end of 2019 after repeated delays.

Read more: The 1967 Six-Day War and its difficult legacy

Strategic tool

Israel hopes that its offshore gas deposits can provide long-term energy security and lower domestic prices, as well as be a diplomatic tool with its Arab neighbors.

In 2016, Israel signed a $10 billion deal with Jordan to buy 8.5 million cubic meters of gas per day over 15 years.

The deal with Egypt adds a new layer to Israel's growing relations with its Arab neighbor, which have traditionally been focused on security issues.

It comes as the prospect of exporting Israeli gas to Europe through the divided island of Cyprus and Turkey has run into difficult geopolitical realities.

Gabriel Mitchell, a policy fellow at the Israeli Institute for Regional Foreign Policies (Mitvim), said that for Israel the gas deal carries more economic than strategic signficance, specially for Delek Drilling and Noble Drilling.

"The developing companies operating in Israel's territorial waters worked tirelessly to find potential buyers, and despite the complications with exporting to Egypt managed to find some kind of framework for cooperation," Mitchell told DW. 

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Egypt set to be major gas producer

Yossi Abu, chief executive of Delek Drilling, said the deal could turn Egypt into an export transit hub for Israeli gas.

"The export deals establish Egypt's status as a regional energy center which allows the supply of gas both to the Egyptian domestic market and for export, and allowing economic development of the Egyptian and the Israeli economies," he said.

The Israel-Egypt gas deal still has to overcome several obstacles. One is transporting the gas from Israel to Egypt. 

Both Israel and Egypt still need to provide regulatory and government approvals for the exports.

cw/rt (AFP, AP, dpa, Reuters)

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