Israel Faces Delay in Finalizing Gas Export Policy Amid Multi-Billion Dollar Deals
More than a year has passed since the interim findings of the Dayan Committee on Israel's gas sector policy were published in April 2025, yet the government has not finalized its recommendations. The delay stems from a major dispute between the Energy Ministry and the Finance Ministry over the permitted volume of gas exports. Despite this, Israel has already signed a $35 billion export deal for gas from the Leviathan field to Egypt, and another significant agreement is forming for the Tamar field, potentially worth up to $20 billion. Both deals comply with the strict export limits proposed by the Finance Ministry during the committee's deliberations.
Israel has become a major gas exporter in recent years, with nearly half of its increasing gas production destined for export. This volume is expected to grow substantially as new export pipelines are completed and large-scale deals with Egypt progress. Egypt urgently needs Israeli gas and is willing to pay premium prices. However, the government agrees on the need to reserve sufficient gas for domestic consumption in the coming decades, but the exact quantity and conditions remain unresolved.
The Dayan Committee, led by Energy Ministry Director-General Yossi Dayan, saw most members, including the Energy Ministry, support maintaining the 2018 policy of reserving 440 billion cubic meters (BCM) for local use. The Finance Ministry opposed this, advocating for a higher reserve of 515 BCM to limit exports further. This proposal aims to secure gas supply for over 20 years but risks reducing incentives for gas exploration, which is already delayed. The Finance Ministry's position was rejected by the committee majority and is expected to appear only as a minority opinion in the final report.
The government cannot make a final decision without the committee's conclusive report. Meanwhile, industry stakeholders express frustration over strategic decisions proceeding without updated data, citing inconsistencies in export permits, renewable energy targets, and infrastructure planning. For example, two major Tamar partners, Isramco and Mubadala (an investment fund from the UAE), signed a memorandum of understanding with Egypt for a multi-billion-dollar gas export deal starting in 2031, potentially totaling $20 billion. Until the Dayan Committee's final recommendations are adopted, export permits follow the 2018 Energy Ministry policy.
The Energy Minister Eli Cohen recently halted the final export permit for Leviathan, demanding commitments to supply affordable gas domestically. Whether this becomes a standard condition or remains an exception is unclear, highlighting the need for a clear, principled export policy. The delay in finalizing policy also affects gas exploration incentives, as companies seek regulatory certainty before investing in high-risk offshore drilling.
Despite the stalemate, the government is advancing plans to build gas import and storage infrastructure, a key recommendation of the interim report that enjoys broad consensus. Industry voices call for the Dayan Committee's final report to be published soon to provide clarity and coherence to Israel's gas sector strategy.
