Egypt says gas deal with Israel is 'strictly commercial'

CAIRO, Dec 18 (Reuters) - Egypt said on Thursday that a natural gas deal with Israel was a "strictly commercial" arrangement with no political dimensions, adding it was concluded by private energy companies under market rules without direct government intervention.

On Wednesday, Israel approved an export deal signed in August with Chevron CVX.N and its partners, NewMed NWMDp.TA and Ratio, to supply up to $35 billion of gas to Egypt from the Leviathan natural gas field.

The deal comes amid heightened regional tensions following Palestinian group Hamas' deadly attack on Israel on October 7, 2023, and Israel's subsequent war on the Palestinian enclave of Gaza that has left tens of thousands dead.

Egypt's position on the Palestinian cause is "firm and unwavering," supporting the legitimate rights of the Palestinian people, rejecting forced displacement, and adhering to a two-state solution, the head of Egypt's State Information Service, Diaa Rashwan, said in a statement.

Israeli Prime Minister Benjamin Netanyahu on Wednesday described the agreement as the largest gas deal in Israel's history, adding it would help bolster regional stability.

Under the deal, Leviathan, which has reserves of around 600 billion cubic metres, will sell about 130 bcm of gas to Egypt through 2040 or until all contract values are fulfilled, NewMed said in a statement.

Egypt's gas production began declining in 2022, forcing it to abandon its ambitions to become a regional supply hub. It has increasingly turned to Israel to make up the shortfall.