Eastern Mediterranean Energy Dynamics Change as Israel Increases Output

Israel Poised for Unprecedented Natural Gas Output

Israel is on track to reach its highest-ever natural gas production in 2026, with major expansions underway at the Leviathan and Tamar fields. These projects are anticipated to push daily output beyond 3 billion cubic feet for the first time. Industry analysts report that the Chevron-operated sites are set to collectively add 600 million cubic feet per day in the near future. Most of this additional supply will be exported to Egypt, following improvements that have eased previous constraints in the export pipeline system. In 2025, Israel’s production dipped slightly from the 2024 record of 2.587 billion cubic feet per day due to temporary field closures during the conflict with Iran in June.

Major Investments and Capacity Upgrades

Chevron, along with its partners NewMed Energy and Ratio Energies, announced a $2.36 billion Final Investment Decision in January 2026 to expand the Leviathan field. This initiative will boost annual production capacity from 12 to approximately 21 billion cubic meters. The expansion includes drilling three new offshore wells, installing advanced subsea systems, and upgrading the platform’s processing facilities. The primary goal is to ramp up natural gas exports to Egypt and Jordan. Meanwhile, output at the Tamar field has been increased, raising its capacity from about 1.1 to 1.6 billion cubic feet per day in 2025.

Pipeline Enhancements and Regional Export Growth

Recent upgrades to the export pipeline network are allowing greater gas volumes to reach Egypt, helping to address local supply shortages. Key infrastructure projects include the modernization of the Ashdod–Ashkelon pipeline and the construction of the Nitzana pipeline, which is expected to be operational by 2028. These developments aim to increase exports to Egypt and Jordan by 1.8 billion cubic feet per day. The 46-kilometer Ashdod–Ashkelon offshore pipeline is currently being upgraded to accommodate higher capacity, with completion slated for this year. Presently, about 55% of Israel’s gas exports flow through the Eastern Mediterranean Gas (EMG) pipeline, while the remaining 45% are transported via the Arab Gas Pipeline through Jordan.

Regional Pipeline Dynamics and New Connections

The Arab Gas Pipeline (AGP) now operates in reverse, serving regional supply needs rather than its original Egypt-to-Turkey export route. In August 2025, the 63-kilometer Kilis-Aleppo pipeline was reactivated, linking Turkey’s network to Syria and delivering 3.4 million cubic meters daily, with plans to increase this to 6 million cubic meters. Jordan uses the AGP to move imported LNG from its Aqaba terminal northward. Additionally, a new onshore pipeline with a 6 billion cubic meter annual capacity is being built from Ramat Hovav to the Egyptian border, expected to be operational by 2028 to further expand export capabilities to Egypt.

Landmark Gas Deal and Shifting Regional Energy Landscape

In the previous year, Israel approved a landmark 15-year agreement to supply Egypt with 130 billion cubic meters of natural gas from the Leviathan field, valued at $35 billion and running through 2040. This historic deal, the largest in Israel’s history, is intended to alleviate Egypt’s acute energy shortages and strengthen economic ties, with strong backing from U.S. diplomacy. The agreement is projected to generate approximately $18 billion in tax and royalty revenue for Israel over its duration. Despite ongoing political challenges, this partnership marks a significant step toward greater regional energy collaboration and stability. Egypt, once aspiring to be a regional gas hub, has recently become a net importer due to declining output at major fields like Zohr and rising domestic consumption. Since 2019, Egypt’s production has fallen by about a third, hampered by underinvestment and infrastructure bottlenecks.

Key Gas Fields and Global Reserves

The Leviathan and Tamar fields are Israel’s principal offshore natural gas assets, currently producing around 12 and 11 billion cubic meters per year, respectively. Both are undergoing expansions, with Leviathan expected to reach 21–23 billion cubic meters annually to meet growing regional demand. Despite these advances, Middle Eastern oil powers still have room to increase gas production further.

As of 2022, Israel’s proven natural gas reserves stood at about 1,087 billion cubic meters, significantly less than Egypt’s 77 trillion cubic feet. The world’s largest natural gas field, the South Pars/North Dome, is shared by Iran and Qatar, containing 51 trillion cubic meters in total reserves, of which 36 trillion are recoverable. Iran controls 14 trillion cubic meters in South Pars, while Qatar holds the majority in the North Field.

Globally, Iran ranks second in gas reserves behind Russia, focusing primarily on domestic consumption, whereas Qatar is a leading exporter. Russia possesses the world’s largest proven reserves, estimated at 1,688 trillion cubic feet (about 38 trillion cubic meters), representing nearly one-fifth of the global total.

By Alex Kimani for Oilprice.com