The energy landscape of the Eastern Mediterranean is undergoing a significant transformation, with Israel taking center stage. A record-breaking natural gas production is on the horizon for Israel in 2026, and the implications are far-reaching. But here's where it gets controversial...
Israel's gas fields, Leviathan and Tamar, are set to boost their output, pushing total production beyond 3 billion cubic feet per day. Experts predict that these fields, operated by Chevron and its partners, will add a substantial 600 million cfd, with most of this surplus destined for Egypt. However, this increase in supply isn't without its challenges. Israel's gas output in 2025 dipped slightly from its 2024 record due to the conflict with Iran, highlighting the region's political sensitivities.
In January 2026, a bold move was made with a $2.36 billion Final Investment Decision to expand the Leviathan field. This expansion aims to increase production capacity to an impressive 21 bcm annually, a significant jump from the current 12 bcm. The plan involves drilling new wells, installing subsea infrastructure, and enhancing processing capabilities. And this is the part most people miss: this expansion isn't just about meeting domestic needs; it's about becoming a key regional exporter, with Egypt and Jordan as the primary beneficiaries.
To facilitate this increased export, Israel is investing in its export pipeline network. Key projects include upgrading the Ashdod-Ashkelon pipeline and constructing the Nitzana pipeline, expected to be operational by 2028. These initiatives are designed to boost exports to Egypt and Jordan by a substantial 1.8 billion cubic feet per day. The Ashdod-Ashkelon pipeline, an offshore natural gas line, is undergoing upgrades to handle this increased capacity. Approximately 55% of the gas will flow through the Eastern Mediterranean Gas (EMG) pipeline, while the remaining 45% will utilize the Arab Gas Pipeline through Jordan.
The Arab Gas Pipeline (AGP) has seen a reversal in its purpose. Originally designed for Egypt-to-Turkey exports, it now operates in reverse, supplying localized and regional needs. In August 2025, the Kilis-Aleppo pipeline was revived, connecting Turkey's grid to Syria, supplying 3.4 million cubic meters a day. Jordan, meanwhile, uses the AGP to transport imported LNG from its Aqaba terminal northward. Additionally, a new onshore pipeline from Ramat Hovav to the Egyptian border, with a capacity of 6 billion cubic meters per year, is under development, further enhancing Egypt's import capabilities.
A historic agreement was signed last year, with Israel committing to supply Egypt with a massive 130 billion cubic meters of natural gas from the Leviathan field over 15 years. This deal, valued at $35 billion, is the largest in Israel's history and is expected to generate significant revenue for the state treasury, estimated at around $18 billion in taxes and royalties. It's a significant step towards regional energy cooperation and stability, despite ongoing political tensions. Egypt's ambitions to be a regional gas hub have taken a turn, with the country now a net importer due to declining production and surging domestic demand.
The Leviathan and Tamar fields are key offshore assets for Israel, with current capacities of approximately 12 and 11 BCM per year, respectively. Both fields are expanding to meet rising regional demand and exports, with Leviathan projected to increase to 21-23 BCM annually. However, the Middle East oil giants have the potential for even higher gas production.
As of 2022, Israel's proven natural gas reserves stand at approximately 1,087 billion cubic meters, significantly lower than Egypt's 77 trillion cubic feet. Iran and Qatar share the South Pars/North Dome field, the world's largest natural gas field, with a combined 51 trillion cubic meters in reserves, of which 36 tcm are recoverable. Iran holds 14 tcm, while Qatar has the majority.
Iran, with the second-largest global gas reserves, focuses on domestic use, while Qatar is a top global exporter. Russia holds the largest proven natural gas reserves globally, estimated at around 1,688 trillion cubic feet, accounting for nearly 20% of the world's total.
This shift in the Eastern Mediterranean gas balance raises intriguing questions. How will these increased exports impact regional politics and energy security? Will Egypt's import reliance affect its ambitions to be a regional energy hub? And what does this mean for the global energy market? Join the discussion and share your thoughts in the comments!
