The standoff has caused a diplomatic rift between the U.S. and Israel, with Energy Secretary Chris Wright reportedly cancelling a visit to the country over the issue.
- Chevron and its project partners had signed a $35 billion export agreement in August to export gas from the Leviathan gas field.
- The project has reportedly stalled due to Israel not approving an export permit until a fair price is agreed upon for gas sales.
- The distribution deal would allow Egypt to import 130 billion cubic metres of gas through 2040.
Chevron Corp. (CVX) is reportedly close to making a final investment decision (FID) on expanding the Leviathan gas field, but continues to await Israel’s government approval for gas exports to Egypt.
“We confirm that we are nearing a Final Investment Decision for potential capacity expansion of the Leviathan reservoir,” Chevron said in an emailed statement, as reported by Reuters.
The Leviathan gas field is Israel’s primary offshore gas source.
Chevron, and its project partners, Israeli energy companies NewMed Energy and Ratio Energies, had signed Israel’s largest-ever export agreement, worth up to $35 billion, in August. The deal would see Egyptian firm Blue Ocean supply gas into the North African country primarily through new pipelines.
What Is The Issue?
Israel’s Energy Minister Eli Cohen has withheld approval of the export permit until a “fair price” is agreed for domestic gas sales from Leviathan. Reports suggest the crux of the issue lies in NewMed Energy’s pricing policy in Israel.
The standoff has drawn U.S. attention, with Energy Secretary Chris Wright reportedly cancelling a visit to Israel over the issue. Washington is reportedly pressuring Israeli officials to approve the export deal.
Cohen and Wright are expected to meet at an energy summit in Athens this week, alongside officials from Greece and Cyprus, to discuss regional energy links connecting the Middle East to Europe.
Why Is The Deal Important For Egypt?
If approved, the Leviathan expansion would help alleviate Egypt’s energy crisis, allowing the country to import roughly 130 billion cubic metres of gas through 2040.
Chevron holds a 40% stake in Leviathan, which has reserves of some 600 billion cubic metres. NewMed holds approximately 45%, and Ratio holds the remaining 55%.
Chevron’s shares were up 0.15% at $153.62 on Wednesday.
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