Egypt has approved the construction of a pipeline to link up with the one that Israel is building from its side, at an investment of $400 million. This investment follows the huge $35 billion gas deal between Leviathan Partners and Egypt, and preparations for approval of the Nitzana pipeline in Israel, which will increase the amount of gas that can be exported to Egypt by 6 BCM per year. Disputes between the exporters have been overcome and signing of the agreement to build the 65 kilometer pipeline in Israel should be approved in two weeks. Gas is expected to flow in the pipeline by 2028.
Egypt is a particularly large gas consumer, and despite having significant gas reserves of its own, it is struggling to meet its energy needs. For Israeli gas companies, especially those that control the export-oriented Leviathan field, this is a prime business opportunity, as Egypt is willing to pay much higher prices for the exported gas compared to the relatively low price of gas sold to the Israeli market. US energy major Chevron is the operator of Leviathan, Israel’s NewMed Energy is the largest shareholder, and Israeli company Ratio is another partner.