Israel’s status as a regional energy superpower was cemented on Friday as the Leviathan reservoir partners announced a Final Investment Decision (FID) to inject approximately $2.4 billion into expanding the field. This massive capital project, led by global giant Chevron alongside Israeli firms New-Med Energy and Ratio Energies, aims to nearly double production capacity by the end of the decade, ensuring long-term economic stability and strengthening geopolitical ties through energy diplomacy.
Energy Dominance Unlocked
- Massive Capital Injection: A confirmed investment of $2.36 billion to drill three new wells and upgrade subsea infrastructure.
- Production Surge: Capacity is set to rise from ~12 BCM to 21 BCM annually by the second half of 2029.
- Strategic Export Anchor: The move follows a historic $35 billion export agreement with Egypt, securing demand for decades.
- Economic Valuation: The Leviathan reservoir’s estimated value has held firm at approximately $18.7 billion.
Operational Milestones and Financial Commitment
The decision to expand Leviathan is not merely an operational update; it is a calculated strategic maneuver involving heavy infrastructure development designed to come online in late 2029.
The partners have committed to a budget of $2.36 billion. It is important to note that this figure includes $504 million that was already approved for development in July 2024. The project entails the drilling and completion of three additional production wells, the installation of advanced subsea systems, and the expansion of the platform’s processing modules. While the immediate target is a production capacity of 21 billion cubic meters (BCM) per year, the infrastructure is being designed with an ultimate capacity ceiling of 23 BCM annually. This expansion effectively transforms Leviathan from a local asset into a trans-regional energy hub.
How Does the Egypt Deal Fuel This Expansion?
The timing of this investment is inextricably linked to the burgeoning diplomatic and commercial relationship between Jerusalem and Cairo, underpinned by natural gas.
The expansion was catalyzed by a recently signed mega-deal with Egypt involving the export of 130 BCM of natural gas. Valued at roughly $35 billion (NIS 112 billion) and extending through 2040, this agreement provides the financial certainty required for such a capital-intensive project. The export structure is tiered: 20 BCM will be supplied starting this year, while the bulk of the volume—110 BCM—is contingent upon the completion of the expansion approved today. This symbiosis between infrastructure investment and export contracts highlights Israel’s indispensable role in the Eastern Mediterranean’s energy matrix.
Corporate Stakeholders and Asset Valuation
The partnership structure reflects a potent mix of American technical prowess and Israeli entrepreneurial spirit, driving the asset’s valuation to staggering heights.
The consortium is composed of New-Med Energy (45.3%), a subsidiary of Yitzhak Tshuva’s Delek Group; the American energy major Chevron (39.7%); and Ratio Energies (15%), owned by the Landau and Rotlevy families. Following the FID, the partners declared that the value of the Leviathan reservoir stands at approximately $18.7 billion, calculated at a capitalization rate of 7.5%. Regarding reserves, estimates remain unchanged at roughly 635 BCM. New-Med Energy has indicated it will fund its share through internal resources and existing credit lines, though it is exploring further financing options including bank loans or bond issuances.
Is This the “Golden Age” of Israeli Energy?
Executives leading the project view this expansion as a definitive victory for the Israeli economy and a stabilizer for the broader region.
Yossi Abu, CEO of New-Med Energy, described Leviathan as a “tremendous energy backbone,” noting that the investment ensures available, stable, and competitively priced energy for Israel and its neighbors. Yigal Landau of Ratio Energies emphasized the domestic impact, projecting that the state treasury will see “revenues of tens of billions of shekels” from the expansion. From a global perspective, Clay Neff of Chevron Upstream highlighted the “pragmatic energy policy” of the US and regional states, which fosters an investment-friendly environment. These statements collectively portray the expansion as a convergence of business interests and national security.
| Metric | Current Status (2025 Era) | Future Target (2029+) |
|---|---|---|
| Annual Production | ~12 BCM (10.9 BCM actual in 2025) | 21 BCM (Max cap: 23 BCM) |
| Sales Revenue | $2.23 Billion (2025) | Significantly Higher (Projected) |
| Infrastructure | Existing Platform & Wells | +3 New Wells, Expanded Modules |
| Strategic Focus | Domestic & Near-Regional | Major Regional Exporter (Egypt Focus) |
Strategic Watchlist
- 1. Monitor Drilling Timelines: Watch for announcements regarding the commencement of the three new production wells to ensure the H2 2029 target remains feasible.
- 2. Track Financing Instruments: Observe how New-Med Energy structures its capital raising (bonds vs. bank loans) as a barometer of market confidence in Israeli energy assets.
- 3. Egypt Export Flow: Keep an eye on the initial 20 BCM delivery to Egypt this year as a precursor to the larger 110 BCM tranche.
Glossary
- BCM (Billion Cubic Meters): A standard unit of measurement for natural gas volume used in production and trade.
- FID (Final Investment Decision): The point in an energy project where the board of directors approves the capital expenditure, moving the project from planning to execution.
- Upstream: The sector of the oil and gas industry involved in the exploration and production of crude oil and natural gas.
- Capitalization Rate (Cap Rate): A metric used here to estimate the present value of the reservoir’s future cash flows (7.5% in this context).
- Processing Modules: Facilities on the gas platform that separate natural gas from other fluids and impurities before transport.
Methodology
This report is based on the official announcement dated January 16, 2026, regarding the Final Investment Decision by the Leviathan partners (New-Med, Chevron, Ratio). Financial figures, production targets, and corporate quotes were derived directly from the provided text, including data on the recent export agreement with Egypt and 2025 performance metrics.
FAQ
Q: When will the benefits of this expansion be realized?
A: While construction and drilling begin soon, the increased gas flow is scheduled to start in the second half of 2029. However, the economic impact is immediate in terms of investment activity, and the strategic impact is already in play via the Egypt export deal.
Q: Who is paying for the $2.4 billion expansion?
A: The costs are split among the partners according to their ownership stakes: New-Med Energy (45.3%), Chevron (39.7%), and Ratio Energies (15%). New-Med has stated it will use internal funds and credit, potentially raising more capital through debt instruments.
Q: How does this benefit the average Israeli citizen?
A: Beyond energy security and electricity price stability, the project generates immense revenue for the state through royalties and taxes. Yigal Landau, CEO of Ratio, explicitly stated that the state is expected to receive tens of billions of shekels from this expansion, which can fund public services, defense, and infrastructure.
Q: Why is Chevron’s involvement significant?
A: Chevron is a top-tier American supermajor. Its continued heavy investment and the statements from its leadership signal strong international confidence in Israel’s economy and security situation, despite regional challenges.
Seizing the Energy Horizon
The Leviathan expansion is more than an engineering feat; it is a declaration of permanence and prosperity. By locking in long-term exports and doubling capacity, Israel is insulating its economy against global volatility while strengthening its diplomatic leverage. Stakeholders should view the 2029 timeline not as distant, but as a rapidly approaching horizon of increased revenue and geopolitical influence.
Final Summary
- Regional Anchor: Israel solidifies its position as a critical energy supplier to the Middle East and potentially Europe via Egypt.
- Economic Windfall: The state stands to gain billions in tax revenue, while the asset itself is valued at nearly $19 billion.
- Unshakable Alliance: The collaboration between Israeli firms and US-based Chevron underscores a resilient economic bond that withstands geopolitical pressures.
- Future-Proofing: Moving to 21 BCM annually ensures domestic needs are met even as export volumes surge.
Why We Care
This development matters because energy independence is a pillar of national sovereignty. The expansion of Leviathan transforms Israel from a nation that once relied on imported fuel into a strategic exporter that powers its neighbors. This generates critical funds for the state budget, lowers the cost of living, and creates a “gas shield” of diplomatic interdependence with Egypt and Jordan, enhancing Israel’s security posture through economic strength.
