Israeli PM approves $35 bn gas export deal to Egypt, biggest in its history

Israeli Prime Minister Benjamin Netanyahu said on Wednesday that he has approved a $35 billion natural gas export deal to Egypt, the biggest gas deal in Israeli history. The agreement could also help repair relations between the two countries strained during the two-year war in the Gaza Strip.

The gas will be delivered to Egypt over the next 15 years by US energy giant Chevron, a key owner of the gas field off Israel's coast in the Mediterranean Sea. Half of the proceeds are expected to go to Israel's state coffers.

In a recorded video statement, Netanyahu said the deal "greatly strengthens Israel's position as a regional energy power, and it contributes to stability in our region.

Egypt, which borders both Israel and Gaza, has served as a key mediator between Israel and the Palestinian militant Hamas group leading up to the US-brokered ceasefire that was agreed on in October. Cairo has also has been a vocal critic of Israel's offensive, which has killed tens of thousands of Palestinians and caused widespread destruction in Gaza.

Egypt did not immediately confirm Netanyahu's announcement.

Israeli Energy Minister Eli Cohen, a close Netanyahu ally, previously held up the deal with Egypt, claiming the terms were not favourable to Israel. His delays prompted US Energy Secretary Chris Wright to cancel a trip to Israel in October.

But Cohen stood alongside Netanyahu during the Wednesday evening announcement and said he supported the final terms of the deal.

Israel discovered sizeable natural gas fields off its Mediterranean coast in the early 2000s and began exporting gas first to Jordan and later to Egypt nearly a decade ago.

In a separate development, German lawmakers approved an expansion of a defense agreement for Israel's sophisticated Arrow 3 missile defense system, Israel's defense ministry said Wednesday.

The expansion brings the value of the deal from $3.5 billion to $6.5 billion, making it the largest Israeli defence export deal ever, according to the ministry. Germany moved to buy Arrow 3 from Israel as it seeks to strengthen its air defences against Russia.