Israel increases natural gas exports to neighboring countries year on year

Although Israel has been in a constant state of combat since last October, the country is doing well in the energy sector. Natural gas deliveries to neighboring countries Egypt and Jordan rose by around 25 % year on year. Israel’s energy sector aims to further increase its export capacity, with the proceeds going into a recently established state investment fund.

The Israeli-Egyptian gas trade takes place primarily along the Ashkelon-Arish route. In 2023, 6,29 billion cubic meters of gas from the Leviathan field went to Egypt. Egypt received most of the 2,56 billion cubic meters produced from the nearby Tamar field. It is worth noting that Tamar is located near the Gaza Strip, which caused a month-long outage last year.

Jordan received 2,71 billion cubic meters, mainly from the Leviathan field. There are two ways to transport gas to this neighboring country. The first runs from northern Israel and connects to the Arab Gas Pipeline (AGP), which runs across the Middle East. The second is a pipeline that connects directly to Jordanian industrial facilities on the eastern side of the Dead Sea.

The official website of Israel’s Ministry of Energy and Infrastructure states that the total export capacity of these three pipelines is approximately 15 billion cubic meters. The ambitious plan is to steadily increase capacity to as much as 25 billion cubic meters through various projects.

Energy Minister Eli Cohen sees rising exports as proof of the commodity’s strategic importance to Israel. He said the increase helps maintain regional stability. He also said Israel is seeking to realize long-discussed plans to supply Europe.

Israel, which discovered large gas deposits in the eastern Mediterranean 15 years ago, is establishing itself as an “energy hub” in the region. Israel would also like to supply Europe in the near future, and a decision on the transport route is currently pending. Implementing the project has been the main subject of a series of talks with Cypriot and Greek counterparts since 2016.

Israel’s Citizens Fund

State officials established the investment fund as a precautionary measure for managing unexpected revenues from extraction. After several years of delay, the fund was set up in 2022. Its main purpose is to prevent so-called Dutch disease, which could reduce the competitiveness of other sectors as a result of a sharp increase in extraction revenues and, in turn, a significant strengthening of the currency (the shekel).