Israel weighs shelving $35 billion Egypt gas deal: report

Israeli Prime Minister Benjamin Netanyahu is threatening to shelve the multi-billion-dollar gas deal with Egypt following allegations that Cairo has violated the 1979 Camp David peace treaty.

The agreement, unveiled in August, would see Israel export up to $35 billion of natural gas to Egypt by 2040, making it the largest gas deal in Israel’s history.

But less than a month after its announcement, Israeli media have reported that Netanyahu is considering postponing the deal due to Egypt’s military buildup in the Sinai Peninsula.

An unconfirmed report last month claimed that Egypt has deployed as many as 40,000 troops near the border with Gaza amid fears that Israel will attempt to forcibly displace Palestinians into Egypt.

There have also been allegations that Egypt has built military infrastructure on the peninsula without consulting Israel, and that the US-led force tasked with overseeing the implementation of Camp David is no longer monitoring Egyptian deployments in the area.

In response, Netanyahu is now planning to discuss whether to suspend the agreement with his energy minister, Eli Cohen, whose approval is required for it to go through, according to Israel Hayom.

Under the new agreement, around 130 billion cubic metres of natural gas will be shipped from the Leviathan gas field to Egypt between 2026 and 2040.

Shipments are due to begin next year after additional pipelines are installed.

Egypt has become increasingly reliant on Israeli gas for domestic use since it signed its first deal with Israel in 2018.

Declining production at its own Mediterranean gas fields has forced it to increase imports to combat a multi-year energy crisis that left it facing nationwide power blackouts.

Egypt and Israel have accused each other of breaching the 1979 treaty since Israel began its assault on Gaza.

Israeli forces have occupied the Philadelphi Corridor since May 2024 in violation of the accords, triggering outcry from the Egyptian government.