After a four-month delay, the Israeli government has approved a $35 billion agreement for the export of natural gas from the Chevron-operated Leviathan field to Egypt. The approval was contingent upon updated terms that address domestic energy security concerns.

Key Conditions and Domestic Priorities

The primary reason for the delay was the government's requirement to protect Israeli consumers. The updated agreement mandates that Leviathan's partners must prioritize domestic gas buyers and ensure the field can compensate for potential supply shortfalls from Israel's other offshore fields, namely Tanin, Karish, or Tamar.

Agreement Details and Production Milestones

The contract covers the export of approximately 130.9 billion cubic meters of gas from 2026 to 2040. This deal will trigger an expansion of Leviathan's production facilities and the construction of a new Israeli pipeline called Nitzana to handle the increased export volumes. Exports can commence once the field's production capacity reaches a minimum of 1.35 billion cubic feet per day, with volume increases tied to achieving further capacity milestones of 1.85 Bcfd and 2.1 Bcfd.

Export Volume Safeguards

The agreement includes a safeguard clause stating that the total export volumes are subject to Leviathan's lifetime production capacity being no less than 535 billion cubic meters. If production falls below this threshold, Israel's Petroleum Commissioner holds the authority to reduce the quantities available for export.

Reactions and Implications

The approval was welcomed by Chevron, which described it as a significant milestone and a key condition for investing in the field's expansion. The company stated the deal reflects a strong partnership and a shared commitment to regional energy security. Following the announcement, the stock prices of Leviathan partners NewMed Energy and Ratio Petroleum rose more than 3% on the Tel Aviv Stock Exchange.