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Israel is hoping its gas will finally make it part of the Middle East

The production platform of the Leviathan natural gas field in the Mediterranean, off Haifa, Israel, as seen last June. (Amir Cohen/Reuters)
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TEL AVIV — With the Russian invasion of Ukraine, Israel’s burgeoning natural gas sector has set its sights on energy-desperate Europe, but it’s also using its newly acquired energy wealth to achieve its long-sought goal of integrating itself into the region with its once-hostile Arab neighbors.

On Wednesday, Israel agreed to pipe billions of dollars’ worth of natural gas to Europe via Egyptian liquefaction facilities, as Russia halts supplies and the continent scrambles to refill dwindling stockpiles. The landmark memorandum of understanding, signed by the Israeli and Egyptian energy ministers and representatives of the European Commission, aims to extricate Europe from Russian energy “blackmail,” European Commission President Ursula von der Leyen said in Jerusalem, a day before flying to the signing ceremony in Cairo.

For Israel, which has needed to grapple with local opposition and the occasional sabotage attempt against undersea gas export pipelines, it’s also a sign that times have changed.

Israel and Egypt sign gas export deal as Europe seeks Russia alternative

“This technical public cooperation, that is coming to help Europe, to which we are the closest countries in the region, is incredibly important,” said Itzhak Levanon, who was Israeli ambassador to Egypt from 2009 to 2011. He served at a time before Israel produced its own gas and instead imported it from Egypt, using the same pipelines it now uses for export.

In total, the contribution of Eastern Mediterranean natural gas to Europe will be a drop in the bucket compared with Russian supplies, but it will be part of a patchwork strategy, pulling from sources around the world, to plug the energy deficit left by Russia.

For many in Israel, last week’s deal was already an important milestone in a years-long attempt to use its gas to thaw icy relations with its neighbors. With skyrocketing energy prices and the gradually fading public opposition to Israel in parts of the Arab world, many Israelis are hoping that the gas export deal may deliver something more even valuable than profit: “more normalization of Israel in the region,” said Moshe Albo of the Institute for Policy and Strategy at Reichman University in central Israel.

While the cooperation is not entirely new — Cairo has hosted the East Mediterranean Gas Forum, including Israel, the Palestinian Authority and six other Mediterranean countries, since 2019 — “the world economic prices is creating a lot of motivation for a lot of players to accelerate,” Albo said.

Even Turkey, where relations were at rock bottom just a few years ago, recently hosted the Israeli president and proposed reviving a natural gas subsea pipeline to Europe, in a sign of warming relations.

Israel discovered two large offshore gas fields in 2009 and 2010, and went on to use the gas for domestic energy independence and then to export it to its Arab neighbors. In 2016, Israel signed a landmark $10 billion, 15-year gas export deal with Jordan’s National Electricity Co., in the “most significant transaction since the peace treaty was signed between the countries in 1994,” said Yossi Abu, chief executive of Israeli gas company NewMed Energy, who attended the meetings in Cairo last week.

Abu said a $15 billion deal signed with Egypt in 2018 similarly helped warm ties that have been generally chilly since the two countries formally declared peace in 1979. It helped Cairo with its goals of establishing itself as a regional energy hub and developed the infrastructure for transporting Israeli natural gas to Egyptian liquefaction plants and then onward to Europe, which will be expanded under the current deal.

The latest gas push comes after the Abraham Accords, a series of normalization agreements between Israel and four Arab states, which sidelined the Palestinian cause and has boosted relations with other “like-minded Arab states,” according to Levanon, the former Israeli ambassador to Egypt.

Among Israelis, it has also produced excitement for Arab business deals that have only rarely come to fruition, said a Bahraini business executive who spoke on the condition of anonymity for fear of compromising his position as a mediator between Israeli and Arab companies. He said private-sector institutions in Bahrain, which was part of the Abraham Accords, have rejected Israeli collaboration offers because many of their customers would oppose it.

“The Palestinian issue will always be there. It’s emotional,” the executive said.

Israeli business and politicians are hoping that gas diplomacy will be potent enough to smooth over tensions related to Israel’s ongoing conflict with the Palestinians.

Energy Ministry Director General Lior Schillat, speaking by phone from Cairo after the signing of the deal, said Israel still viewed energy as unique, in that it could be a “source of cooperation rather than a source of dispute.”

“The fact that this is coming from the Middle East,” he said, referring to the region’s conflict-riddled history, “is an even stronger message.”

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