Egypt is set to invest $400 million in a new pipeline to connect with a line Israel is building to the Nitzana border crossing, a move that will significantly increase natural gas imports and strengthen Egypt's energy security.  

The investment follows a $35 billion gas deal between Egypt and the partners in Israel's Leviathan field, according to a report by the Saudi London-based newspaper Asharq Business.

As a net importer of liquefied natural gas, the new pipeline is a critical component of Egypt's strategy to meet its growing domestic energy needs, with gas from Israel being a more economical alternative to expensive LNG imports.

For the Leviathan partners, which include U.S. energy giant Chevron, Israel's NewMed Energy, and Ratio, the deal presents a major business opportunity, which will see Egypt import more Israeli gas at higher prices compared to the subsidized rates for the domestic Israeli market. 

As part of the deal, the partners will increase gas production and expand export infrastructure to Egypt to cater to the demand, with the exporters expected to finance the 65-kilometer Nitzana pipeline. 

With the internal dispute between exporters overcome, the project’s partners are nearing a final agreement to enable timely project completion, with gas expected to begin flowing through the pipeline by 2028. 

The new pipeline is projected to increase the amount of gas exported to Egypt by 6 billion cubic meters per year. 

While Egypt has ambitions to become a regional energy hub by importing, liquefying, and re-exporting gas, it is currently prioritizing imports from Israel and Cyprus to satisfy domestic demand. 

Egyptian Prime Minister Mostafa Madbouly announced that the country expects to resume its own gas exports in 2027.

The Leviathan gas field expansion project has faced delays, with the deadline pushed back five times. However, in February, Chevron Mediterranean announced that the third subsea pipeline would be completed by the end of 2025.