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Long-stalled Nitzana pipeline to finally begin construction? Chevron and its Israeli Leviathan partners NewMed Energy and Ratio Energies inked a USD 610 mn agreement with pipeline operator Israel Natural Gas Lines to build the long-awaited Nitzana pipeline connecting Israel and Egypt, NewMed Energy said in a disclosure (pdf) to the Tel Aviv Stock Exchange. The 600 mn cubic feet a day (mcf/d) pipeline stretching 65 km between Israel’s southern gas network and Egypt’s gas network in eastern Sinai will bring Israel’s export capacity to Egypt to 2.2 bcf/d when construction wraps up in 2028, Reuters reports, citing a Chevron statement.
The project has been plagued by delays due to volume allocation and cost burden disagreements between Chevron’s partners and Israel’s Natural Gas Authority, with the launch of the pipeline initially planned for this year. The delay will cap Israeli gas exports to Egypt at 1.6 bcf/d from 2H 2026, limiting Egypt’s ability to secure a more affordable alternative to costly LNG shipments amid rising domestic demand and declining production.
The news follows a USD 35 bn natural gas export agreement between the two countries last month, which will see 130 bn cubic metres of gas exported to Egypt from 2026 through 2040 under an amendment to an existing 2019 gas export agreement. Flows will first increase from 4.5 bn cubic metres in 2025 to 6.5 bn cubic metres as early as 2026 under the first 20 bn cubic meter phase of the agreement.
The future of the agreement is uncertain after Israeli Prime Minister Benjamin Netanyahu froze it amid rising Israeli-Egyptian tensions.
IN OTHER ENERGY NEWS-
The Madbouly government reached an agreement with Italy’s Eni to connect Cyprus’s offshore Cronos gas field to Egypt’s Zohr infrastructure to be liquefied and re-exported, an unnamed government source told Asharq Business. The government will make between USD 1-1.5 per mn British thermal units (BTU) exported, with volumes expected to reach 500 mcf/d once operations begin in 2027.
That’s not all: Plans are underway to fast-track the connection of another one of Cyprus’s offshore gas fields, Aphrodite, to the Zohr infrastructure, raising the combined capacity from both fields to 1.3 bcf/d of gas set to be routed through the network by 2028.
REMEMBER- Egypt and Cyprus inked multiple agreements earlier this year that will see Cyprus ship natural gas from its offshore fields to be liquefied in facilities in Idku and Damietta before being re-exported to foreign markets.
