Israel has moved forward in the reconfiguration of its role in the region’s energy landscape following the approval of the historic agreement regarding the export of natural gas from the Israeli-Egyptian border by Prime Minister Benjamin Netanyahu. With a value of almost $35 billion, this is the greatest energy export agreement that Israel has ever participated in.
What is inside the Landmark Gas Agreement
The contract is a move that will see a United States massive energy company, Chevron, alongside Israeli firms, supply Egypt with natural gas in the coming years.
In a statement, Netanyahu confirmed that a total of 112 billion shekels would be part of this deal, a large chunk of which would find its way into Israel’s coffers. According to Energy Minister Eli Cohen, this is an unprecedented sales milestone.
Economic Benefits to Israel
A major portion of the receipts is expected to go towards public spending. Netanyahu stated that the funds would help improve the vital areas of the sector’s performance such as the health, education, infrastructure and security industries.
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Apart from the financial benefits that the deal provides for the country, it provides predictability for the investors.
Strengthening Regional Energy Links
Egypt gains assured gas supplies from Israel, thus helping Egypt become an energy hub in this region through liquefaction and subsequent export. On Israel’s side, this deal cements Israel’s importance as one of the major gas suppliers in this region.
There are reports that Israeli officials believe such gas collaborations help stabilize this region because economic interests become leverage in fostering diplomatic ties.
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A Strategic Shift in the Eastern Mediterranean
This was confirmed by Israeli energy firm NewMed Energy, who said the agreement was historic for the energy industry. The agreement is expected to see the total gas volumes Egypt imports increase to 130 billion cubic meters.
This is seen as a strategy to employ the use of energy resources not only as a means to create revenue but also as an application to wield the said resources as instruments for strategic regional relationships.
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Disclaimer: This article is based on official statements and company disclosures; financial figures and timelines may evolve with regulatory or market changes.