Israel consents to boosting gas exports to Egypt

Israel is set to expand its natural gas exports to Egypt, originating from the offshore Tamar field, as announced by Energy Minister Israel Katz. This decision comes amid a resurgence of interest in offshore exploration and an ongoing debate regarding whether the gas should primarily serve domestic needs. Egypt, with its population of 105 million, has been experiencing a surge in gas demand and has witnessed a 9 percent year-on-year decrease and a 12 percent decline when compared to the same period in 2021 in gas production between January and May. The nation has grappled with power shortages, particularly during heatwaves, which have spiked demand for cooling.

Minister Katz emphasized that he greenlit the increased exports after ensuring that Israel's domestic gas supply was secure. “This step will increase the state’s revenue and strengthen diplomatic ties between Israel and Egypt,” Katz said in a post on X, the social media platform formerly known as Twitter, though he did not provide further details.

While vast gas reservoirs have been discovered off Israel's Mediterranean coast in the past 15 years, the government has implemented limitations on the amount that can be exported to safeguard future domestic needs. This issue has been a subject of fervent debate for years and was reignited recently when Israel's budget director warned of the risk of over-exporting, potentially jeopardizing energy security. Public advocacy groups in Israel have cautioned against potential gas shortages as domestic demand escalates and have raised concerns about the environmental impact of increased offshore activity.

In 2022, energy companies in Israel produced 21.29 billion cubic meters (bcm; 751.85 billion cubic feet) of natural gas, with only 9.21 bcm (325.25 billion cubic feet) designated for export. These exports were directed to Egypt and Jordan. Egypt has been actively seeking a regional role in the supply chain, not only by selling its own gas but also by re-exporting Israeli gas as liquefied natural gas to the Middle East, Africa, and Europe.