Israel said on Feb. 26 that gas supplies to Egypt and Jordan rose by about 25% in 2023, despite brief disruptions at the start of the war in Gaza, adding that exports could be expanded further.

Israel is positioning itself as a regional energy hub and has committed to supply natural gas to Europe, which has been diversifying away from Russia since its invasion of Ukraine.

"The dramatic growth in natural gas exports to Egypt and Jordan proves just how much the natural gas market is a strategic asset for Israel and helps regional stability," Israel's Energy Minister Eli Cohen said in a statement.

Cohen said Israel is examining the possibility of expanding exports to enable supplies to Europe, either through Egyptian liquefaction plants or by building local facilities.

The offshore Leviathan field, operated by Chevron CVX.N with two Israeli partners, produced 6.29 Bcm for Egypt and 2.71 Bcm for Jordan, the ministry said.

The nearby Tamar field exported a total of 2.56 Bcm, with most going to Egypt. The Tamar rig is close to the Gaza Strip and saw an 11% production drop due to a month-long halt in operations at the start of Israel's war against Hamas.

Israel discovered huge deposits of natural gas in the east Mediterranean 15 years ago and major production began in 2013.

In total, the ministry said gas production jumped 13.9% from 2022, leading to a record year in state royalties of 2.19 billion shekels (US$603 million), which will feed into a nascent sovereign wealth fund.

The fund, aimed at preventing the Israeli shekel from overheating from a sudden expansion in national wealth, was set up in 2014 and was supposed to begin operating in 2018.

But after a four-year delay due to political turmoil and a delayed revenue stream, the fund started operating in June 2022 once taxes on profits from natural gas and other resources had passed a required minimum of 1 billion shekels.

The fund's assets are forecast to grow to as much as $12 billion in the next decade, the government has said.

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