State-owned Israel Natural Gas Lines (INGL) and partners of the Leviathan gas field including Chevron and NewMed have signed a $610 million contract for the construction of the Nitzana natural gas pipeline to supply gas to Egypt.
Local sources confirmed on Wednesday that the 65-kilometre pipeline will run from Ramat Hovav in southern Israel to the Nitzana crossing on the Israeli-Egyptian border.
“This milestone reflects Chevron’s commitment to advancing energy security in Israel and regionally,” said Jack Baker, managing director of Chevron’s Eastern Mediterranean Business Unit.
“The Nitzana export route will deliver substantial domestic economic benefits and also support energy security across the Eastern Mediterranean region.”
The American energy company said the engineering, procurement, and construction (EPC) contract will last for a period of 15 years.
The pipeline project will deliver at least 600 million cubic feet of natural gas per day when completed by 2028.
It is expected to increase Israel’s total daily gas exports to over 2.2 billion cubic feet.
Leviathan mega supply deal
The Nitzana project is part of a broader measure to boost Egypt’s gas supplies and solve lingering energy challenges.
“The Nitzana pipeline project is a direct continuation of the huge deal we signed with our Egyptian partners, and both of them together move us forward toward making a final investment decision worth billions of dollars in the expansion project,” said NewMed CEO Yossi Abu.
In early August, NewMed disclosed the Israeli government approved a $35 billion gas supply agreement with Egypt that will allow the delivery of gas from the Leviathan field.
The export agreement, described as the largest in Israel’s history, was to allow the sale of up to 130 billion cubic metres (bcm) of gas from Leviathan field to Egypt through 2040.
The agreement was to be executed in phases. The first phase was to supply Egypt with 20 bcm of gas in early 2026 when additional pipelines are connected.
For the second phase, a new transmission line was to be attached to the Leviathan project via Nitzana to export the remaining 110 bcm to Egypt.
Israel’s Leviathan brings Egypt relief
The Leviathan gas field has become critically important for Egypt, both economically and geopolitically.
As the largest natural gas field in the Mediterranean, it has increasingly supplied Egypt in recent years, helping to ease the country’s widening energy deficit.
Cairo is grappling with declining domestic production as mature fields face depletion and technical challenges.
By June, Egypt’s gas output had dropped to 4.2 billion cubic feet per day (Bcf/d), against an estimated domestic demand of 6.2 Bcf/d.
The shortfall has forced the country, once a leading African gas exporter, into becoming a net importer, relying heavily on Israeli supplies.
Ironically, Israel now fills the role Egypt once played, having depended on Cairo for its gas needs in the past.
Israel would later discover several gas-rich fields in its offshore waters like Leviathan that now play a central role in its long-term energy strategy.
“Leviathan is a national project and its expansion is the anchor of Israel’s energy security for the coming decades,” Abu said.
The field has around 600 bcm of gas in reserves and is operated by Chevron (39.9%), alongside NewMed Energy (45.3%) and Ratio Oil Corp. (15%).
