Israel Hayom: Netanyahu orders that no new gas export agreement to Egypt be implemented without his approval, and the fate of the $35 billion deal remains unclear

Israel Hayom (Israel Today) newspaper said on Tuesday that Israeli Prime Minister Benjamin Netanyahu had ordered that a new agreement to export natural gas to Egypt would not be implemented without his approval.

According to Israel Hayom, comes on the heels of reports that Cairo had violated the security annex to the peace treaty it signed with Israel in Washington on March 26, 1979.

The treaty was signed following the Camp David Accords between the two countries in 1978.

Its most prominent provisions included the cessation of the state of war, the normalization of relations, and the withdrawal of the Israeli army from Egypt’s Sinai Peninsula.

Israel Hayom reported that Netanyahu has directed that the massive gas deal between the Leviathan field partners and Egypt not proceed without his approval.

The Israeli newspaper added that this comes “in light of reports that Egypt is violating the peace treaty with Israel.”

In light of this decision, Netanyahu will discuss with Energy Minister Eli Cohen the possibility and means of moving forward with the agreement.

On August 7, Ratio and Unimed Energy, owned by the Delek Group, owned by Israeli businessman Yitzhak Chuvala, signed a deal to export natural gas from the Leviathan field to Egypt.

Under the deal, the largest for Israel, the two companies will sell 130 billion cubic meters of gas to Egypt by 2040 for $35 billion.

Egyptian energy company Blue Ocean Energy is the buyer, according to the Israeli newspaper.

This deal joins the supply chain of Israeli natural gas to Egypt over the past five years.

According to the law, the Israeli Minister of Energy is authorized to ratify the deal on behalf of Israel, and without his signature, it won’t enter into force.

Netanyahu added, “However, the deal has now been reconsidered at the highest levels of government, and Netanyahu has instructed it to be presented to him”.

Israel Hayom said, “Reports indicated that Egypt had violated the security annex to the peace agreement with Israel in recent years,” adding “The international monitoring force, led by the United States, has stopped monitoring the Egyptian military deployment in Sinai”.

According to Israel Hayom, Israel’s ambassador in the US, appealed to the Trump administration at the beginning of his second term in January to resume monitoring.

Israel Hayom added, “This appeal comes after a long series of reports indicating that Egypt has built tunnels in Sinai capable of storing weapons and expanded airport runways”.

“Egypt also brought in infantry and armored forces beyond those permitted in the annex, and without obtaining Israeli approval as stipulated”.

Israel Hayom added, “Egypt hasn’t responded to the US pressure, and some violations continue”.

Israel Hayom continued, “It now appears that Israel is using an effective economic card in the energy sector for the first time, by linking Egypt’s compliance with its obligations to Israel’s willingness to supply it with the gas it so desperately needs”.

According to Israel Hayom, “For many years, Egypt has suffered from a shortage of energy sources, to the point that power outages sometimes occur in some areas of the country for several hours, as the increased supplies from Israel aim to alleviate this shortage”.

According to political sources, the Prime Minister and Minister Cohen now intend to ensure that Egypt fulfills its obligations under the peace treaty.

Israeli gas is usually transported to Egypt via an offshore pipeline from the Leviathan and Tamar fields to a receiving station in North Sinai.

Cairo uses these supplies to cover part of its domestic demand, and re-exports quantities of them as liquefied natural gas via the liquefaction plants in Idku and Damietta to European and Asian markets.

Relations between Cairo and Tel Aviv have been strained since Israel, with US support, launched a genocidal campaign against the Gaza Strip, which borders Egypt, on October 7, 2023.