The 20-year LNG contract between Gazprom subsidiary Gazprom Marketing and Trading Switzerland and Levant LNG Marketing Corp. also provides a major boost for Russia's drive to rebuild its Cold War influence in the Middle East that collapsed with the demise of the Soviet Union.
The deal, signed Feb. 26, is a direct consequence of a ground-breaking visit to Israel, the United States' most valuable strategic ally in the region, by Russian President Vladimir Putin last June.
With U.S. interest in the Middle East seemingly diminishing, in part because of vast shale oil and natural gas deposits that lessen dependence on Persian Gulf oil, Putin clearly has ambitions of filling the vacuum.
"The Bill Clinton-era in the geopolitics of Caspian energy, which ran through the George W. Bush presidency, imbued with a great sense of rivalry over Russia's status as an energy powerhouse, is giving way," said veteran Indian analyst M.K. Bhadrakumar.
"This is one of the messages to be pulled from the ... 20-year deal for Israel's Tamar offshore gas field in the Mediterranean.
"Without doubt, the Tamar deal rewrites the ABC of the geopolitics of energy security," Bhadrakumar wrote in an Asia Times Online analysis.
"This is an important milestone for strengthening Gazprom's position in the global LNG market" and in particular "Gazprom's hand in the booming Asian LNG market."
The Tamar field, discovered in 2009, contains an estimated 9 trillion cubic feet of gas. Together with the smaller Dalit offshore field nearby, it constitutes the Tamar LNG Project due to be commissioned in 2017.
It's expected to produce around 3 million metric tons of LNG a year.
This will likely involve an $8 billion floating LNG terminal, probably off Cyprus, that will also funnel gas from the island's Aphrodite field, still being developed but thought to contain at least 7 tcf, for export.
Moscow's also seeking partnerships with the Greek-controlled sector of Cyprus, and has provided a three-year, $3.5 billion loan to help it avoid economic meltdown after the collapse of the Greek economy.
The Greek Cypriots have approached the Kremlin for another $5 billion and may well get it because they share the Orthodox faith.
Moscow, which has long had close banking ties with Greek Cyprus, also sees the island, divided since a 1974 Turkish invasion, as a future regional energy power, just as it does Israel.
Moscow, which has little time for the Turks who are trying to block the Greek Cypriots' gas bonanza, is thus maneuvering to get a slice of the Israel-Cyprus action.
It's clearly anticipating Israel's largest offshore field, Leviathan, with an estimated 25 tcf of gas, coming onstream in a couple of years.
But there's a wider, and infinitely richer, energy bonanza developing in the region.
Lebanon, whose waters border both those of Israel and Cyprus, is expected to start issuing tenders to international companies to explore its maritime exclusive economic zone.
Seismic surveys of its southern sector, which overlaps Israel's Leviathan, indicate reserves of at least 7 tcf, with further deposits in the north for a possible total of 25 tcf.
The U.S. Geological Survey says the Levant Basin, encompassing Syria, Lebanon. Cyprus, Israel and the Gaza Strip, contains 123 tcf of gas and 1.7 billion barrels of oil.
Syria's civil war is preventing seismic soundings in its waters but there's every reason to assume they contain similar-sized gas fields. Moscow's showing signs of backing off its support for President Bashar Assad, possibly with an eye on a future gas boom under a successor government.
Meantime, Russia's secured stakes in Iraq, a former Soviet client which has proven oil reserves of 143.1 billion barrels and probably as much again in explored fields.
Moscow, ever one to hedge its bets, even hosted a visit in February from Massoud Barzani, president of Iraq's semi-autonomous Kurdish enclave, which sits on 45 billion barrels of oil.
If the independence-minded Kurds ever break with the federal Iraqi state, Moscow, which in the 1950s gave asylum to Barzani's father, the champion of Kurdish independence, wants access to their oil.