European Commissioner for Energy Kadri Simson, European Commission President Ursula von der Leyen, Egyptian Petroleum Minister Tarek El Molla, and Israeli Energy Minister Karine Elharrar, from left to right, in Cairo, Egypt on June 15, 2022. Photo: Dati Bendo

Israel on Wednesday signed a preliminary agreement with Egypt and the European Union that will enable it to export natural gas to the 27-member bloc for the first time.

Israeli Minister of Energy Karine Elharrar inked the deal, which also addresses collaboration on trade and transportation, while attending the East Mediterranean Gas Forum in Cairo. Under its terms, natural gas will be transported from Israel and other sources to Egypt, where it will be liquefied before moving on to the EU.

The EU is currently looking to diversify its energy supply after imposing oil sanctions on Russia over its invasion of Ukraine. Russia was the EU’s largest supplier of natural gas in 2020 and 2021, accounting for roughly 40 percent of the bloc’s natural gas imports for both year.

The agreement will last for three years, after which it will be automatically renewed for another two year period. In the long-term, the EU aims to decrease its use of natural gas after 2030 in order to meet its goal of a zero-emissions economy by 2050.

The EU will also encourage investments by European companies in Israeli and Egyptian natural gas exploration and production.

Speaking in Cairo, Ursula von der Leyen, president of the European Commission, called the deal “a big step forward in the energy supply to Europe, but also for Egypt to become a regional energy hub.”

Israel has transformed in recent years from being a gas importer to a gas exporter and is currently working to increase production.

“This is a historical moment in which the small country of Israel becomes a significant player in the global energy market,” said Elharrar in a statement.

The Israeli Energy Ministry added that natural gas exports serve “as a diplomatic lever and makes a geo-political contribution to Israel.”