Israel restricts gas exports but energy minister says increase will boost revenues and diplomatic ties.

“This step will increase the state’s revenue and strengthen diplomatic ties between Israel and Egypt,” Katz said on Wednesday in a post on X, the social media platform formerly known as Twitter, though he did not provide further details.

Egypt, which has faced growing demand for gas from its population of 105 million, has seen its gas production between January and May decline by 9 percent year-on-year and 12 percent when compared with the same period in 2021. The country has grappled with power shortages as heatwaves have driven up demand for cooling.

Katz added that he approved the new exports after ensuring that supplies for Israel’s domestic use were guaranteed.

Huge gas deposits have been discovered in the past 15 years off Israel’s Mediterranean coast, but the government, in order to ensure the local market has enough in the future, has set limits on how much can be sold abroad.

The issue has been hotly debated for years and was reignited in recent weeks after Israel’s budget director warned that the country risked exporting too much, endangering energy security.

Israeli public advocacy groups have warned that Israel could suffer gas shortages as domestic demand rises and have raised the prospect of environmental damage from heightened offshore activity.

In 2022, energy companies in Israel produced 21.29 billion cubic meters (bcm; 751.85 billion cubic feet) of natural gas, with just 9.21 bcm (325.25 billion cubic feet) of it exported. The exports went to Egypt and Jordan.

Egypt has been seeking a regional supply role, selling its own gas and re-exporting Israeli gas as liquefied natural gas to the Middle East, Africa and Europe.