The signing of the massive gas deal with Egypt goes far beyond its headline price tag of $35 billion. One of the main reasons for the agreement's delay was Egypt's problematic conduct toward Israel on political and security issues.
The understandings between Israel and Egypt on the gas deal do not include an Egyptian commitment to withdraw prohibited forces from the Sinai Peninsula. Israel Hayom has learned that accompanying understandings include dialogue on mechanisms to address Egyptian violations. The US has promised to promote handling of the issue, but there is no clear commitment to rectify the situation.
In Israel, officials believe that once gas deliveries begin and Egypt becomes energy-dependent on Israeli gas, this dependence will serve as leverage to deter Cairo from violating the peace treaty. They also argue that had Israel not supplied Egypt with gas, its southern neighbor would have turned to Qatar. According to information gathered in recent years, Egypt has introduced forces into Sinai far beyond what is permitted under the security annex of the peace treaty. It has also built tunnels deep inside Sinai for storing weapons and has suspiciously extended runways at airfields.
A security achievement
As far as is currently known, none of these problems has been fully resolved. The excess Egyptian forces will remain in Sinai, but Egypt has given commitments to limit their activity. Prime Minister Benjamin Netanyahu hinted that Israel achieved several gains on the security front.
Despite the agreement, efforts to politically warm relations with Egypt have so far failed because of the war in Gaza, which has yet to end, and the tense atmosphere between the presidential palace in Cairo and the Prime Minister's Office in Jerusalem. The Americans examined the possibility of holding a summit meeting between Netanyahu and Egyptian President Abdel Fattah el-Sisi, with US President Donald Trump participating, but the Egyptians rejected the idea.
Alongside these issues, the gas agreement enables Israel to achieve several strategic objectives. The first is Egypt's dependence on Israeli gas, which it uses both for domestic energy needs and for liquefaction and export to Europe, a vital source of foreign currency without which Egypt's economy would collapse. Egypt has gas fields of its own, but they are insufficient for these purposes. This dependence constitutes Israeli diplomatic and security leverage over its southern neighbor, though its impact is limited to major strategic issues, chiefly reducing or even eliminating concerns that Egypt might cancel its peace treaty with Israel.
An energy powerhouse?
Israel is consolidating its status as a regional power in the energy sector. It supplies gas to Egypt and also to Jordan, which uses it for a significant portion of its energy consumption. The agreement with Israel comes at Qatar's expense. Doha had been in talks with el-Sisi on building a new gas pipeline from Qatar's giant gas fields to Egypt. Laying such a pipeline would take years, and Egypt did not have the time to wait.
The agreement opens the door to additional energy projects in cooperation with Gulf states, projects that have been on the table for a long time and are expected to advance once an agreement is reached to bring Saudi Arabia into the Abraham Accords, likely not before elections and the formation of a new government in Israel.
In the energy sphere, under the agreement Israel will build an additional gas pipeline between Ramat Hovav and Nitzana, enabling further increases in exports to Egypt. The deal is expected to restart tenders for exploration of new gas fields in the eastern Mediterranean, and the Energy Ministry is set to renew preparations for those exploration bids.
Another reason for the delay in the agreement with Egypt was the Energy Ministry's demand that remaining reserves in existing fields be sufficient for Israeli domestic consumption and remain priced at the current low levels. According to the Energy Ministry, these demands were fully met.
