Keeping air conditioners and fans running was a main concern for many people during the exceptionally hot summers that Egypt has experienced over the past three years. In 2023 and 2024, prolonged power cuts disrupted daily life, even when scheduled outages were rotated across neighbourhoods.
The blackouts stemmed from a mismatch between gas supply and demand. Most of Egypt’s power stations run on natural gas, with the sector consuming 60 per cent of the country’s supply. Rising summer demand, coupled with declining production, forced the government to resort to load shedding.
The shortfall in production was largely due to technical problems at the Zohr Field in the Mediterranean. Output from Egypt’s largest gas field fell sharply from a peak of over 2.7 bcf/d (billion cubic feet per day) to around 1.9 to 2 bcf/d in 2024. The decline transformed Egypt from a net exporter into a net importer of gas.
By 2025, the situation had improved, with electricity maintained in nearly all households during the summer months. To achieve this, the Ministry of Petroleum pursued a multi-track policy that secured energy supply year-round, especially during peak demand.
First, the government moved to secure short-term supply. It signed agreements with global suppliers to purchase 125 gas shipments annually for three to five years. The US financial service Bloomberg listed suppliers including Saudi Aramco, the Trafigura Group, Vitol Group, Hartree Partners, BGN, Shell, and Azerbaijan’s Socar.
Not all the deals were traditional imports. In February 2025, Egypt finalised a $3 billion agreement with Shell and TotalEnergies, operators of offshore Mediterranean and Western Desert fields. Gas produced locally is transferred into liquified Natural Gas after being processed in the liquefication facilities in Idku and Damietta, then either sold domestically to cover shortages or exported to Europe and other markets.
This expansion drove a 188 per cent year-on-year surge in LNG imports during the first 11 months of 2025, reaching 7.8 million tons, with full-year volumes expected at 8.5 million tons, according to CNN Business.
However, analysts expect imports to fall by at least 30 per cent in 2026 as domestic production improves and renewables gain ground.
Resorting to FSRU:Most of Egypt’s natural gas imports, excluding those from Israel, arrive by sea as LNG. To utilise these imports, Egypt leased four Floating Storage and Regasification Units (FSRUs), which convert LNG back into gas and store it until fed into the national grid.
During the summer, three units, Energos Eskimo, Energos Power, and Hoegh Galleon, operated at the SUMED and Sonker terminals in Ain Sokhna on the Red Sea, offered a combined regasification capacity of 2,250 mmcf/d (million cubic feet per day).
The Energos Winter, stationed at Damietta on the Mediterranean, added another 450 mmcf/d. Meanwhile, the Energos Force FSRU, docked at Jordan’s Aqaba Port and linked to the Arab Gas Pipeline, contributed 750 mmcf/d that can be allocated between Egypt and Jordan during emergencies.
The decline in Egypt’s gas output since 2023-2024 has increased the country’s gas imports from Israel. The Israeli option was economically accepted as it is transferred as gas not LNG via the already existing Arish-Ashdod pipeline and also costs almost half that of LNG shipments.
Israeli gas accounts for about 15 to 20 per cent of Egypt’s consumption, according to data by the Joint Organisations Data Initiative, a global collaboration by major energy organisations to collect data on global oil and gas markets.
However, different circumstances limit the dependence on imports from Israel during the year.
While Egypt was planning to increase its Israeli imports of gas by 50 per cent in mid-2024, an increase in Israeli local demand as well as planned maintenance at major fields resulted in a drop in imports during the early months of summer.
In June, during the 12-day war between Israel and Iran, exports from the Leviathan Field were halted for security reasons.
The slowdown in Israeli gas imports led to the freezing of gas supplies to some energy-intensive industries that normally account for 35 to 40 per cent of industrial gas consumption.
In August, it was revealed that Egypt had extended its 2019 gas export deal with Israel until 2040. Under the deal, the Leviathan Field off Israel’s Mediterranean coast, with reserves of some 600 billion cubic metres (bcm), will sell about 130 bcm of gas to Egypt through 2040 for $35 billion.
According to Reuters, the average cost of imported LNG comes in at $13.5 per million British thermal units (Btu) excluding the cost of leasing FSRUs, compared to $7.75 for Israeli gas before the new deal. The news agency also noted that the price of the new deal might be 20 to 25 per cent higher than the $7.75 level.
However, a report by the Middle East Economic Survey, which focuses on oil and gas, noted that whatever Israel’s export capacity, the volume that Egypt can import is capped at the capacity of the Arish-Ashdod pipeline, which currently stands at 1.4 bcf/d.
According to a report by Egypt Oil and Gas, a local oil and gas platform, the Ashkelon-Arish pipeline, also known as the East Mediterranean Gas (EMG) pipeline, constructed to deliver natural gas from Egypt to Israel, has a capacity of 147 to 247 bcf/d.
In May 2023, approval was granted for the Nitzana route, a 65 km onshore pipeline that will transport Israeli natural gas to Egypt. Once operational, it will enable the export of an additional 580 mmcf/d. The pipeline will run from Israel’s southern Negev region to the Egyptian grid near Nitzana, according to Wood Mackenzie, an energy consultancy.
However, this new pipeline will not be operational until 2027.
Contrary to expectations, the deal was frozen in October, with rumours citing political reasons or disagreements between the field operators and the Israeli Ministry of Energy.
However, Israeli Prime Minister Benjamin Netanyahu said in a Televised statement on December 18 that Israel has approved the deal describing it as the country’s largest-ever gas deal.
A MEES report on December 19, noted that Egyptians were unmoved by the Israeli PM’s initial decision to delay the gas deal due to “security concerns in Gaza and Cairo’s lack of cooperation and have been quick to pour cold water on any notions that the deal is of wider significance.”
It added that in a statement on 18 December Egypt’s State Information Service (SIS) chairman Diaa Rashwan downplayed the political significance of the deal and said that it is “a purely commercial transaction.”
CYPRUS GAS: The search for other sources of gas until local production recovers extends to Cyprus, where abundant gas reserves have been discovered and local demand is limited.
Exporting Cypriot gas to Egypt is the most economically feasible option because Egypt already has extensive existing LNG infrastructure, which avoids the massive costs and delays of building new facilities in Cyprus.
Alternatives such as constructing a Cypriot LNG terminal, building a pipeline to Greece, or exporting directly to Europe were considered but found to be more expensive, technically complex, and politically uncertain.
In October, Egypt and Cyprus signed two commercial agreements for transporting natural gas from the Cypriot Cronos Field to Egypt. The deals set out the operational and commercial frameworks governing the transportation, supply, processing, and liquefaction of the gas for export, as well as the utilisation of Egypt’s natural gas infrastructure for the project.
Cypriot gas will be transmitted to Egypt via a subsea pipeline connecting Cyprus’s offshore fields (such as Aphrodite and Cronos) directly to Egypt’s gas network and LNG plants at Idku and Damietta.
The deal is advantageous to Egypt as it will have the Right of First Refusal (ROFR), allowing it to decide whether to purchase gas liquefied in local plants or export it to Europe.
If Egypt opts to purchase the piped gas, the cost will be less than importing LNG and then changing it back to the gaseous state to pump it into the local network. Moreover, Egypt will be getting a fee for liquefying and then exporting the gas to Europe.
Shipments from Cypriot fields will start flowing in 2027.
NEW MEASURES: Egypt has also worked on dealing with various internal problems affecting gas supplies.
Part of the reason for the decline in production starting in 2023 was that Egypt, under the pressure of the then dollar crunch, had failed to pay dues to foreign partners, who in turn had become reluctant to invest in their concessions.
While there are no official figures for the value of these arrears, a search by Al-Ahram Weekly found that Egypt paid $1 billion in July 2025 followed by $500 million in September, and it was supposed to pay another $620 million before the end of the year.
Furthermore, it should pay between $250 and $350 million in the first quarter of 2026.
Another step taken to appease foreign partners was introducing a profitability factor, known as the R-Factor, in some new contracts. Traditional Production Sharing Contracts (PSC) allocate fixed percentages of production between the government and the contractor, regardless of profitability. By contrast, the newer R-Factor model makes profit-sharing dynamic: the contractor gets a larger share in the early stages (to recover costs) while the government share increases as the age of the project increases.
It also agreed with some international companies that they can export part of their shares rather than giving them to the state. Different international companies have exported six cargoes of LNG to Turkey, Greece, and Italy since the beginning of the year.
In the first half of December, Karim Badawi, minister of petroleum and mineral resources, attended two events, the Egypt Oil and Gas 2025 Convention and the Al-Ahram Annual Energy Conference, during which he presented developments in the sector.
Badawi noted that the ministry has been applying a strategy aiming at increasing upstream activities related to exploration and production in oil and gas fields. The measures have included streamlining regulations, offering investment incentives, making the bidding process transparent and easy, and commissioning seismic surveys of the offered fields.
The success of these measures was seen in the 383 new oil and gas wells that have been introduced to Egypt’s production up to October 2025.
Badawi noted that the strategy had enabled the ministry to successfully reverse the trend of declining production for the first time in four years. Moreover, the new discoveries, together with other developments, have added 190,000 barrels of crude oil and condensates and 1,100 million cubic feet of gas per day that are now flowing into the system, powering Egyptian industries and securing its energy independence.
Badawi also highlighted a plan to drill 480 new exploratory wells in five years with 101 wells assigned for 2026 alone.
At the Al-Ahram Annual Energy Conference, Badawi announced that three international companies, Eni, BP, and Arceous, have committed themselves to investing $16.7 billion in the coming five years.
He outlined the ministry’s strategy to cut fossil-fuel reliance and expand green energy investments, including sustainable aviation fuel (SAF), green ammonia, and bioethanol. In December, Qatar pledged $200 million for a SAF plant in Ain Sokhna, the first Qatari industrial project in the Suez Canal Zone, that is designed to convert cooking oil into SAF.
A week earlier, Egypt granted its first SAF licence to a subsidiary of the Egyptian Holding Company for Chemicals (ECHEM) to build an Alexandria facility producing 120,000 tons a year of jet fuel from used cooking oil, reducing CO2 emissions by 400,000 tons.
Badawi also noted 117 renewable energy projects at petroleum sites and efficiency measures that have cut emissions by 1.4 million tons.
* A version of this article appears in print in the 25 December, 2025 edition of Al-Ahram Weekly
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