- Egypt is negotiating with energy firms and trading houses to buy 40–60 LNG cargoes and 1 million tonnes of fuel oil to address summer power shortages.
- Falling domestic gas production, delayed payments to oil firms, and reduced Israeli gas supply have worsened Egypt’s energy crisis.
Egypt is negotiating with energy firms and trading houses to purchase 40 to 60 liquefied natural gas (LNG) cargoes, aiming to prevent power shortages ahead of peak summer demand.
To secure the needed supply, the country may spend as much as $3 billion at current market prices, which would further strain already-stretched government finances. Egypt continues to battle falling gas production, delayed payments to international energy companies, and a worsening cost-of-living crisis.
According to an official statement seen by Reuters, President Abdel Fattah al-Sisi ordered the government to “preemptively take whatever steps necessary to ensure stable electricity flow ” on Wednesday, May 21.
An industry source explained that Egypt is considering importing at least 40 LNG cargoes and around 1 million tons of fuel oil. “The primary focus is on gas due to more flexible payment terms than fuel oil. However, fuel oil remains a backup option if LNG prices become unfavourable,” the source added.
Egypt has suffered recurring blackouts over the past two years, mainly due to an insufficient natural gas supply. In February, the country’s gas output dropped to its lowest level in nine years. As a result, Egypt reverted to being a net gas importer in 2023, scrapping its earlier goal of becoming a supplier to Europe.
A second trading source noted that Egypt could require up to 60 LNG cargoes in 2025. Over the longer term, that number could rise to 150 cargoes if domestic production lags behind demand.
Egypt has opened talks with Qatar, Algeria, Saudi Aramco, and several major global trading houses to meet its energy needs. However, officials from Egypt’s Ministry of Petroleum, Qatar Energy, Saudi Aramco, and Algeria’s Ministry of Energy and Mining did not immediately respond to requests for comment.
So far this year, Egypt has imported 1.84 million tons of LNG, roughly 75% of its projected total for 2024, according to data from S&P Global Commodity Insights.
Adding to the pressure, supply from Israel’s Leviathan offshore gas field has fallen due to scheduled maintenance. This disruption forced Egypt to shut down or scale back gas deliveries to multiple fertiliser factories for at least 15 days.
“My factory has been completely shut down since Saturday, May 25,” the head of one affected plant told Reuters on condition of anonymity. “Others are operating at partial capacity.”
A prolonged halt could impact fertiliser exports, which serve as a vital source of foreign currency for Egypt.
According to data from the Joint Organisations Data Initiative (jodi), Israel supplies 40–60% of Egypt’s imported gas, accounting for roughly 15–20% of the country’s overall gas consumption. However, two industry sources suggest Israel may raise export prices by 25%.
One source said Israel links its gas prices to oil, which has declined, bringing the current rate down to about $6 per million British thermal units (mmBtu). In contrast, LNG prices, tied to benchmarks like the Japan Korea Marker (JKM), Dutch TTF hub, or Henry Hub in the U.S., have climbed closer to $14/mmBtu. “Israel was satisfied when prices hovered around $7.50/mmBtu,” the source explained.
A spokesperson for Israel’s Energy Ministry emphasised that pricing remains a business matter. “The Government of Israel is not a party to these negotiations. Pricing is determined through agreements between companies,” she said.
Egypt’s Ministry of Petroleum did not yet respond to requests for comment.