Egypt has shifted from exporting to importing liquefied natural gas (LNG) due to declining domestic gas production and rising demand.
Research suggests the country secured up to 290 LNG cargoes through 2026, costing over $8 billion. It seems likely that deals with suppliers like Shell, Aramco, and Trafigura aim to stabilize the power grid during peak summer. The evidence leans toward challenges like technical issues at the Zohr field driving this shift, straining finances.
In 2025, Egypt signed multiple deals to import LNG, with agreements for up to 290 cargoes over the next 2.5 years, starting as early as July 2025. These deals, costing over $8 billion, involve major suppliers like Shell, TotalEnergies, Saudi Aramco, Trafigura, and others, with prices tied to European benchmarks and flexible payment terms.
Egypt’s energy landscape has undergone a significant transformation in 2025, marked by a strategic shift from being a net exporter to a net importer of liquefied natural gas. This change reflects the country’s efforts to address domestic energy challenges amidst declining gas production and surging demand, particularly during peak summer months. Below, we provide a detailed analysis of this shift, its drivers, and implications, drawing on recent developments and market dynamics.
The shift is driven by declining domestic gas output, particularly from the Zohr field, due to technical difficulties and unpaid debts to foreign operators. Rising domestic demand, with summer energy bills expected to surge to $3 billion monthly from July 2025, has necessitated imports to prevent blackouts.
Historically, Egypt positioned itself as a regional energy hub, leveraging its LNG infrastructure, including the Egyptian LNG (ELNG) terminal at Idku and the SEGAS LNG complex at Damietta. These facilities, with capacities of 7.2 mtpa and 5.5 mtpa respectively, enabled Egypt to export LNG to Europe and Asia, achieving net exporter status by 2018, largely due to the Zohr field’s production. However, domestic consumption and supply constraints led to a reversal, with Egypt resuming LNG imports in June 2024 after a hiatus since 2018, importing 2.5 million metric tons via the Hoegh Galleon floating storage and regasification unit (FSRU) at Ain Sokhna.
The country has agreements for up to 290 LNG cargoes over the next 2.5 years, starting as early as July 2025. This includes a $3 billion deal with Shell and TotalEnergies for 60 shipments in 2025, signed in late 2024, and additional contracts for more than 100 cargoes with suppliers like Hartree Partners and BGN.
Major suppliers include Saudi Aramco, Shell Plc, Trafigura Group, Vitol Group, Hartree Partners LP, BGN, Azerbaijan’s Socar, and TotalEnergies. These deals involve a diverse range of energy firms and trading houses, reflecting Egypt’s broad engagement to secure supply.
Prices are tied to European gas benchmarks, such as the Dutch TTF hub, with premiums ranging from $0.70 to $0.95 per million British thermal units (MMBtu). Payment terms allow for deferrals of up to 180 days, providing financial flexibility amidst fiscal pressures.
In 2024, Egypt had already imported 2.25 million tons of LNG, equivalent to nearly 90% of its total purchases the previous year, highlighting the scale of the import surge. For 2025, the country aims to import 155-160 shipments to close the gap between demand and supply, estimated at around 6.2 billion cubic meters of gas.
The shift to LNG imports is driven by several interconnected factors. Egypt’s domestic gas output has plummeted, particularly from the Zohr offshore gas field, which has faced technical difficulties and production shortfalls. Unpaid debts to foreign operators have further exacerbated the supply crunch, limiting investment and output.
Domestic energy demand has surged, especially during summer, with monthly energy bills expected to rise to $3 billion starting in July 2025, up from $2 billion the previous year. This increase is driven by power generation needs to prevent blackouts and meet industrial and residential demand.
The combination of low production and high demand has created an energy crunch, necessitating imports to stabilize the power grid. Recent tenders, such as 20-cargo tenders for Q3 and Q4 2024 and a 4-cargo tender for Feb-Mar 2025, reflect Egypt’s proactive approach to securing supply.
Market dynamics also play a role, with reversed arbitrage favoring the Atlantic basin, expected to persist into summer 2025, benefiting Egypt’s import strategy. The interbasin spread (JKM-NWE) on February 6, 2025, was 17.1 cents/MMBtu, closing the arbitrage compared to $1.325/MMBtu the previous year, making imports more viable.
To support its import strategy, Egypt is upgrading its LNG infrastructure. This includes facilities in Alexandria and Ain Sokhna, where it operates three FSRUs, with a fourth expected from Turkey’s BOTAS. The Hoegh Galleon at Ain Sokhna has been crucial for 2024 imports, handling 2.5 million mt, while Jordan imported 0.9 million mt primarily for Egypt in the same year.
Egypt’s market strategy involves increasing longer-term deals to cover gas demand and mitigate spot market volatility. Recent tenders show a trend toward higher premiums, with Q1 2025 tenders at TTF plus $0.80-$1/MMBtu, compared to $1.50-$1.60/MMBtu for Q4 2024 and $1.60-$2/MMBtu for Q3 2024, reflecting tightening supply and rising costs.
The shift to LNG imports has significant implications for Egypt’s energy sector and economy. The cost of these deals, exceeding $8 billion, is straining government finances, especially given the flexible payment terms and the need to manage fiscal deficits.
Egypt’s ambition to be a regional energy hub is challenged by domestic supply constraints, with plans to supply Europe abandoned in favor of meeting local needs. While the focus is on imports, Egypt continues to emphasize eco-friendly operations at its LNG facilities, such as waste management at ELNG and advanced fire protection systems.
Challenges include technical issues at key fields like Zohr, unpaid debts to foreign operators, and the need to balance domestic consumption with potential future export ambitions. The country’s reliance on imported Israeli gas and the relocation of FSRUs further complicate the energy landscape.
Egypt became a net LNG exporter in 2018 after achieving gas self-sufficiency, largely due to the Zohr field’s production. In 2024, LNG exports reached 5.69 million tons, down from 7.14 million in 2023 due to domestic gas shortages and summer demand spikes.
Recent developments include plans to boost exports in 2025 by increasing gas production and reducing domestic consumption, with Egypt aiming to leverage high European demand and global LNG price trends. However, challenges like declining gas output and infrastructure constraints persist. Egypt’s LNG sector is vital to its energy industry, with two main facilities.
Egyptian LNG (ELNG) at Idku: Operated by a consortium including Shell, Petronas, and EGAS, it has two trains with a total capacity of 7.2 million metric tons per annum (mtpa). It exported 3.54 million tons in 2024, primarily to Europe and Asia, with 53 cargoes shipped, leveraging Egypt’s strategic Mediterranean location.
SEGAS LNG at Damietta: Operated by Unión Fenosa Gas (Eni and Naturgy), it has a single train with a 5.5 mtpa capacity. After resuming operations in 2021 following a decade-long halt, it exported 2.15 million tons in 2024, with 31 cargoes.
Egypt’s shift to LNG imports in 2025 reflects a pragmatic response to domestic energy challenges, driven by declining production and rising demand. With deals securing up to 290 cargoes through 2026, the country aims to stabilize its power grid and meet summer peaks, though financial and operational hurdles remain. This strategic pivot underscores Egypt’s evolving role in the global LNG market, balancing domestic needs with regional aspirations.
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