Will the huge $35 billion deal for Israel to export gas to Egypt get underway soon? “Globes” has learned of significant progress in talks between the Ministry of Energy and Infrastructure and the gas production companies. According to the agreement currently being discussed, the gas partners will commit to supplying gas to the domestic economy at a lower price, which will be tied to what is set in the gas export agreement.
The gas export deal with Egypt was recently halted by Minister of Energy and Infrastructure Eli Cohen, after it was signed in August. But the gas export agreement now appears to be back on track and electricity prices in Israel likely to fall.
US Energy Secretary Chris Wright canceled his visit to Israel in early November due to the delay in issuing the export permit for the Leviathan partners to export gas to Egypt. The US strongly supports the deal, and one of the reasons Israel will likely approve the deal is due to pressure exerted by US President Trump.
Cohen said last month that the halt to exports would continue “until a fair price for the Israeli market is agreed on.” Now, it seems that the conditions for this have been met: gas prices will be linked to the formulas originally set in the gas framework agreement. This is expected to cut prices for private electricity producers that have not yet signed a gas agreement: Reindeer (Generation Fund), OPC Hadera (OPC Energy) and Dorad (Adltech and Alumay-Luzon).
This will also mean lower electricity prices in the future, or at least prevent them from rising. The gas producers will lose out from lower prices for the domestic market but will receive the certainty that the export agreement brings them if approved. To some extent exports will subsidize domestic prices.
Following Leviathan’s large export deal and the signing of full-capacity contracts by competing Energean gas fields, a situation arose in which the Tamar field was left almost alone as a player in the local economy. This led to the collapse of Israel’s largest gas deal with the Israel Electric Corp. (IEC), due to disputes over the price and concerns Israel would not continue to enjoy the low prices it had received until now, and the gas export deal was halted.
“In Egypt they are angry about the delay”
The details of the deal between the state and the gas production partners have not yet been finalized, but it is expected to be signed this week. It includes, among other things, protections for the local economy in the event that the gas reserves in Israel’s offshore fields turn out to be lower than expected, and it is not yet clear how long the repeated price controls that were common during the gas framework agreement period will continue. It is also not yet clear what the impact will be on the Tamar deal with the IEC, which was a significant part of the reason for the entire export curb in the first place.
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There is also concern about Egypt’s alternative to the natural gas it needs: liquefied gas from Qatar, which is working to exploit the opportunity created by the delay in government approval of the huge $35 billion Egyptian deal. Liquefied gas from Qatar would be much more expensive for Egypt, and yet they need the gas and are willing to pay for it.
An Egyptian official said they are “angry” about the delay, “We are neither enemies nor friends, but business partners. Israel is not the only market. There is also Qatar, the US and others.” At the very least, this is a means of pressure on Israel. The US has also joined this pressure, and is interested in
The Ministry of Energy and Infrastructure said, “The dialogue between the parties is continuing with the aim of formulating solutions that will ensure the needs of the local economy, alongside the possibility of exporting to countries in the region. Beyond that and at this stage, we will not elaborate.”
Minister of Energy and Infrastructure Eli Cohen declined to comment.
Published by Globes, Israel business news – en.globes.co.il – on December 2, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
