$400 Million Egypt-Israel Pipeline to be Constructed

In what has been hailed as a landmark energy deal, Israel and Egypt have signed a new agreement valued at $35 billion to significantly expand the export of natural gas from Israel’s offshore Leviathan field to Egypt.  This deal will entail the establishment of the Egypt-Israel Pipeline. The new deal, which amends a previous agreement, is set to run through 2040. Additionally, it is the largest export deal in Israel’s history.

The agreement comes as Egypt grapples with rising domestic energy demands and a decline in its own gas production. While Egypt had previously aimed to become a regional energy hub through its liquefied natural gas (LNG) facilities, it has now become a net importer of gas.

Egypt-Israel Pipeline Project Factsheet

Cost: Approximately $400 million.

Project type: New pipeline construction, built entirely within Egyptian borders.

Financing: The cost of the pipeline will be borne entirely by Egypt.

Implementation: The project is expected to be implemented by the Egyptian Natural Gas Company (GASCO).

Construction start: The pipeline is expected to begin construction in the fourth quarter of 2025.

Phased implementation: The larger $35 billion gas deal is being implemented in two phases:

• First phase: Initial gas flow is set to begin in early 2026, contingent on the completion of the new pipeline and expansion of existing infrastructure.
• Second phase: This phase, which involves a larger volume of gas (up to 3.9 trillion cubic feet), is conditional on meeting investment requirements and further expansion of the gas transport infrastructure.

Benefits of Egypt Importing Israeli Gas Via Pipeline

Importing gas via pipeline from Israel is significantly more cost-effective for Egypt than purchasing more expensive LNG from the global market.

Furthermore, the new deal is structured in two stages. The first stage is expected to begin in the first half of 2026 and will increase annual gas supply from the Leviathan field to Egypt. The second stage is scheduled to begin in 2029. It will further boost supply after the completion of an expansion project at the Leviathan field and the construction of a new land pipeline from Israel to Egypt.

Significance of the Pipeline

This new pipeline will cost Egypt $400 million. It will be built on Egypt’s side and is key to the increased gas flow.

Analysts have noted the deal’s strategic importance for both nations. Additionally, for Israel, it solidifies its position as a major regional energy supplier. For Egypt, it provides long-term energy security but also creates a significant reliance on Israeli gas. The deal has been described as a “win-win” for both sides. Israel will gain a reliable export market and Egypt will secure a cheaper and stable source of energy.

Other Pipeline Projects in Africa

In another similar projects, the EACOP is another major pipeline under construction between Tanzania and Uganda. This pipeline will be the world’s longest heated pipeline upon completion. Also, Morocco and Nigeria plan an ambitious pipeline that will spur economic growth between the countries. With development of this pipeline projects, it indicates African countries are gearing up on the crude oil and natural gas sector in order to bring economic growth.