Israeli gas stops flowing into Egypt

What’s happened?

Natural gas flows from Israel to Egypt have been reduced since mid‑October, following the closure of the Tamar field in Israel by Chevron (US), the operator, for security reasons related to the ongoing conflict in Gaza. Egypt’s liquefied natural gas (LNG) trains have been suspended as a result, just weeks after restarting from a pause over the Egyptian summer months, when domestic demand surged.

Why does it matter?

The Gaza war has raised questions about the viability of plans for natural gas exports from the eastern Mediterranean to the tight European market. A reliable supply from the region depends on the integration of gas operations in Egypt, Israel and Cyprus. Egypt is the largest producer in the region, and it is the only country to have LNG export terminals, at Idku (east of Alexandria) and Damietta, with a combined capacity of 12.2m tonnes/year. Israel has been exporting gas to Egypt since 2020 using a pipeline that runs off the coast of Gaza and northern Sinai. This gas has covered a portion of Egypt’s burgeoning domestic demand, allowing for a surplus to be exported as LNG.

The supply for Egypt (and via a pipeline to Jordan) comes mainly from the Leviathan and Tamar fields. Leviathan, which is further offshore than Tamar, is continuing to operate, and gas is reported to be reaching Egypt via a pipeline link with Jordan. However, the volumes are likely to be negligible.

Meanwhile, Israel has approved plans for Leviathan to export gas directly to global markets from a floating LNG plant, with capacity to process 7bn cu metres/year. This appears to have put paid to an alternative plan to link Leviathan to Idku and Damietta. The Cypriot government is considering a proposal to link the as yet undeveloped Aphrodite field (which extends into Israeli waters) to the Egyptian LNG terminals, which could be an extra source of supply in future, but Egypt’s gas position is tight, as many of its own fields are in decline.

What next?

Operations at the Tamar field are likely to resume, once the military situation in Gaza stabilises, which would also allow for exports to Egypt to revert to their previous levels. This might take months.A longer‑term risk is that the Israel-Hamas conflict heightens long‑term political risk calculations for international oil companies operating in the eastern Mediterranean. Discoveries such as Leviathan in Israel, Zohr in Egypt and Aphrodite in Cyprus gave potential for the region to become a significant source of natural gas supply to Europe. Offshore gas platforms, LNG facilities and cross‑border pipeline links are vulnerable to attack, whether from Palestinian groups or Hizbullah, a Lebanese‑based militia, which has shore‑to‑sea missile capabilities.

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