Several months after receiving Israeli government permission to significantly increase natural gas exports to record levels, NewMed Energy (TASE: NWMD) is trying to reopen the agreement with the Ministry of Energy and Infrastructure because of the strengthening of the shekel against the dollar.

"Globes" has learned that NewMed Energy, controlled by Yitzhak Tshuva’s Delek Group (TASE: DLEKG), which holds about 45% of the Leviathan offshore gas field, has approached the ministry with an urgent request to change the mechanism for linking gas prices, after the sharp appreciation of the shekel has dramatically eroded its profits from the domestic market.

The result of opening the agreement could be an increase in gas prices for electricity production in the short term, a move that would severely harm private power plants that have not yet signed contracts, and would put upward pressure on electricity rates for Israelis. However, the Ministry of Energy is already indicating a hard line, and officials in the ministry are insisting: "The request will not be granted."

Seeking a contract denominated in shekels

As part of the deal between the state and NewMed, the partnership was given an export permit in exchange for a commitment to sell to the domestic economy at a relatively low price. However, this price was denominated in dollars ($4.7 per thermal unit), and since the exchange rate drop, NewMed's profit from sales to Israeli power plants has been eroded, while a major portion of its expenses are in shekels. The partnership wants the option of denominating agreements in shekels, apparently according to the exchange rate at the time of signing the agreement with the state, which was NIS 3.2/$.

The state's agreement with Leviathan was signed as a condition for receiving the export permit to Egypt, for a huge deal worth $35 billion over many years. However, this deal was signed in the shadow of concerns about competitive problems in the gas market because of the growing demand for energy, combined with the collapse of the large deal between the Tamar partners and the Israel Electric Corp.

The concern that arose was that approving exports to Egypt would cause problems in the domestic economy, which would push the price of gas upwards along with electricity rates. Thus Minister of Energy Eli Cohen unexpectedly decided not to approve the export permit, making it conditional on a commitment to supply the Israeli economy with all the gas that Leviathan would not export at the relatively low price of $4.7 per thermal unit.

Now less than six months later, the dramatic fall in the shekel-dollar exchange rate has led NewMed to request reopening the agreement. When the deal was signed in December 2025, the dollar exchange rate was NIS 3.2/$, or NIS 15 shekels per thermal unit. Today, it is only NIS 13.6, up from NIS 13.1 last week when the shekel’s strength peaked.

At the time the agreement was signed, the shekel-dollar exchange rate seemed low, and neither party considered the implications of a further decline. Thus, it was set that deals in Israel are also linked to the shekel-dollar exchange rate, while about a third of NewMed's expenses, including employee salaries, real estate, and suppliers, are in shekels.

The Ministry of Energy is expected to oppose the request and insist on the wording of the agreement signed in December, including the linkage to the shekel-dollar exchange rate. From their perspective, agreeing to raise gas prices in the short term is problematic, and maintaining low gas prices is part of what Energy Minister Cohen is striving to achieve ahead of the elections.

Lobby 99, which claims to represent rank and file citizens, says, "The audacity of the gas monopoly knows no bounds. It is not enough that the Ministry of Energy approved for them to export gas on an astronomical scale and laid the infrastructure that will allow them to remain a monopoly in the future. It is not enough for them that the regulated price agreed upon in the export permit is about 10% higher than the average price today. Now they are asking to raise it even further, when the public will foot the bill. It is very good that the Ministry of Energy is indicating that this will not happen. It is time to demonstrate a much stronger backbone against the gas companies, and to protect the public interest."

Published by Globes, Israel business news - en.globes.co.il - on June 9, 2026.

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