Israel on Wednesday said it will boost natural gas production from its offshore Tamar field and increase exports to Egypt, which is contending with rising demand and falling output.

Exports to Egypt will be increased by an additional 38.7 billion cubic meters (bcm) of natural gas over 11 years, the ministry said, and production from Tamar will grow by 60%, or 6 bcm annually, from 2026.

"This step will increase the state's revenue and strengthen diplomatic ties between Israel and Egypt," Israel's Energy Minister Israel Katz said.

In 2022, energy companies in Israel produced 21.29 bcm of natural gas, with 9.21 bcm of it exported to Egypt and Jordan.

Egypt, which is facing growing demand for gas from its population of 105 million, has seen its production decline between January and May by 9% year-on-year and 12% when compared to the same period in 2021. The country has grappled with power shortages as heatwaves have driven up demand for cooling.

Katz said that he approved the new exports to Egypt after ensuring that supplies for Israel's domestic use were guaranteed. One-third of the additional natural gas produced from Tamar will be sold locally, his ministry said.

Huge gas deposits were discovered in the past 15 years off Israel's Mediterranean coast, but the government, in order to ensure the local market has enough in the future, set limits on how much can be sold abroad.

The issue has been hotly debated for years and was reignited in recent weeks after Israel's budget director warned that the country risked exporting too much, endangering energy security.

Israeli public advocacy groups have warned that Israel could suffer gas shortages as domestic demand rises and have raised the prospect of environmental damage from heightened offshore activity.

Egypt has been seeking a regional supply role, selling its own gas and re-exporting Israeli gas as liquefied natural gas (LNG) to the Middle East, Africa and Europe.

（Picture: Veer）