Israel’s Tamar field to increase production after sealing export agreement with Egyptian firm

Israel’s Tamar gas field is set to increase production, partly to export six billion cubic feet per year to Egypt.

Partners at the Tamar field, which is led by the US firm Chevron, agreed on Sunday to invest millions of dollars to increase the field’s production and export capacity, Reuters reported.

Though Egypt produces gas domestically and imports additional volumes from Israel, it still has a deficit of natural gas supply to meet domestic demand. Electricity cuts take place across the country daily as part of the government’s strategy to reduce energy consumption.

Regardless, the government continues to export small quantities of gas and has agreed with Israeli and European governments to increase the amount of gas shipped from Egypt’s liquefaction facilities to European markets.

The US$24 million investment to expand production in Israel’s Tamar field comes after Egyptian import firm Blue Ocean Energy reached a sales agreement on February 16 with Tamar’s operating companies, according to reports in the Israeli press.

Blue Ocean Energy is partnered with a firm owned by the General Intelligence Service, Mada Masr revealed in 2018.

Under the new agreement, partners in the Tamar field are to sell an additional four billion cubic meters of natural gas per year to Egypt for a period of 11 years. The import of additional volumes is due to start on July 1 of next year, reports said.

Egypt already buys around two billion cubic meters of gas per year from Tamar, as well as imports volumes from Israel’s Leviathan field.

After approving the initial agreement in summer last year, Israel's Energy Minister Israel Katz said that the “step will increase the state's revenue and strengthen diplomatic ties between Israel and Egypt.”

Tel Aviv temporarily stopped production at Tamar when Israel started bombing the Gaza Strip following the unprecedented Hamas operation of October 7.

The production halt directly impacted Egypt, with power cuts at households nationwide lengthening as a result.

Production at Tamar and exports to Egypt were subsequently restored.