Egypt is advancing on parallel tracks to position itself as a regional energy hub. This ambition goes beyond becoming a major gas exporter, whether locally produced or re-exported, as its scope continues to expand on a daily basis.
Discussions on electricity interconnections with regional markets and Europe are unfolding alongside announcements of new gas export deals, cross-border agreements to supply renewables, and investments in industries that support all kinds of energy.
The most recent news on this path to the energy hub is related to electricity interconnections. Last week, Egypt and Libya resumed talks to upgrade their electricity interconnection with the goal of increasing Egypt’s capacity from the current 150 MW to 2 GW, to help in dealing with the severe electricity shortage in eastern Libya by exporting part of Egypt’s electricity surplus.
Egypt is expanding its grid connections with massive investments. The allocations for electricity sector investments during the current fiscal year are LE136.3 billion, almost double last year’s level, to lift generation to 235 billion kWh by June, supporting exports and cross-border energy exchanges.
The country currently has interconnection links with Jordan, Sudan, and Libya and is working on an interconnection with Saudi Arabia.
According to Egypt Oil & Gas, a local energy platform, Egypt’s power link with Jordan, which currently operates at 550 MW, is undergoing an upgrade to reach 2,000 MW. Meanwhile, its cooperation with Libya has advanced from a 240 MW connection to plans for a 2,000 MW interconnection that could eventually extend Egypt’s reach into the Maghreb region.
To the south, the Egypt-Sudan grid tie, launched in 2021 at 80 MW, is being expanded to 300 MW, though political instability has slowed progress, noted the platform. At the same time, the flagship Egypt-Saudi Arabia project is pressing ahead, targeting an exchange of 3,000 MW and representing a pivotal step towards regional energy integration.
Such integration goes beyond the region, as the planned Egypt-Europe electricity interconnection via Italy witnessed an important development recently, with Egypt agreeing with an Emirati company to carry out final technical, environmental, and financial studies for the project. The tie-up will export energy generated by renewables to Europe through Italy’s power grid using undersea cables.
The project paves the way for Egypt to export surplus renewable power, up to 3 GW of transmission capacity, to European markets.
Egypt is also positioning itself as a bridge between Eastern Mediterranean renewable energy producers and European markets. This strategy builds on a series of interconnection agreements with Cyprus and Greece aimed at integrating the region’s power networks and facilitating the cross-border electricity trade.
A 2025 study by the Oxford Institute for Energy Studies, entitled Economics of Electricity Grid Interconnections, explains the attractiveness of such interconnections, noting that through them countries can import cheaper electricity instead of running expensive local plants.
Cross-border trade also fosters competition, driving down prices for consumers and enabling countries to share infrastructure by pooling resources instead of building redundant power plants.
The most recent international evidence of the importance of interconnections comes from France, which, due to its heavy reliance on nuclear power, faced a serious problem when several reactors shut down in 2022-2023 for delayed maintenance.
With reduced nuclear output, the country had to depend heavily on electricity imports from Germany, Belgium, and Spain.
However, the Oxford report stresses that interconnections require large upfront capital investment and long lead times, often complicated by differing national regulations and market structures. Political and geopolitical tensions can also undermine trust and expose countries to risks of dependency on external suppliers.
Between 2014-2015 and 2023-2024, Egypt’s electricity exports averaged $62.25 million annually, equivalent to 234 GWh. The bulk of these exports went to neighbouring countries, with Libya accounting for 59 per cent and Jordan for 41 per cent. The expansion of generation capacity, driven by the commissioning of mega power plants and major upgrades to transmission infrastructure, has underpinned this growth.
Another importance of such connections is that they help renewable energy integration. While wind and solar power fluctuate, interconnections allow excess renewable power to flow to neighbours, helping countries meet climate goals by reducing their reliance on fossil fuels.
While Egypt does not yet export large volumes of solar or wind electricity directly, it is positioning itself as a regional hub for renewable energy exports through hydrogen, solar cell manufacturing, and battery storage projects.
It has already started exporting green hydrogen produced in the 100 MW green hydrogen project in Ain Sokhna, with shipments already reaching European and US markets. While most renewable electricity is consumed domestically, Egypt is investing in solar cell manufacturing and battery storage plants to be able to store the produced electricity to support future exports of renewable technology and components.
GAS AGREEMENTS: While electric interconnection projects are gaining momentum, it is the gas agreements that are considered the real evidence of Egypt’s growing role as an energy hub.
During the last month, Egypt signed memoranda of understanding (MoUs) to supply Lebanon and Syria with natural gas. The MoUs, according to statements by the Ministry of Petroleum and Mineral Resources (MoPMR), state that Egypt will use its gas transmission network and floating storage and regasification units (FSRUs) to provide the two countries with gas.
The MoPMR statements did not mention the source of the gas, especially as Egyptian gas output, despite a mild recovery in 2025, is still at one of its lowest points in eight years.
However, observers confirm that Egypt will supply the two countries with gas it imports from Israel, a possibility that seems valid in the light of the wording of the ministry’s statement noting that the supplies will be “re-received and re-supplied” to sisterly countries.
The same observers note that Cairo can also export Cypriot gas to the two nations at a later stage.
Egypt’s gas-exporting agreements with both Cyprus and Israel are developing. As usual, the agreements with the latter, being both politically and economically sensitive, attract most of the attention.
A deal to export $35 billion worth of Israeli gas to Egypt was signed in August. However, certain expansion requirements in Israel’s huge Leviathan Field, which has reserves of 1.2 billion cubic feet of gas and is the main field exporting gas to Egypt, were delaying the agreement entering into force.
This came to an end last week. NewMed, a partner in the Field, released a statement noting that the $35 billion Israel-Egypt gas export deal “has taken effect”, adding that all of the conditions necessary for the export to Egypt agreement have been satisfied. This came after the US company Chevron, the operator of the field, decided to expand it to 2.1 billion cubic feet per day (cfd) through 2029 by adding new wells.
Leviathan is currently contracted to supply 450 million cfd annually to Egypt. Volumes are due to rise to 650 million cfd in the second half of this year once pipeline bottlenecks have been resolved, before rising to 1.15 billion cfd in 2030 when the first stage of the Leviathan expansion is complete. Egypt also receives around 300 million cfd from Chevron’s other Israeli gas field, the one billion cfd Tamar Field.
Last year, Israel supplied Egypt with approximately 880 million cfd of gas, down 10 per cent on the previous year’s record of 981 million due to maintenance works in the fields.
As for the deal involving Cypriot gas, the final details were discussed earlier this month when Egypt’s Minister of Petroleum Karim Badawi visited Nicosia to finalise commercial and technical arrangements with the Cypriot authorities.
Cyprus is poised to start exporting gas as early as next year, following progress on the Cronos offshore gas field, which holds an estimated 3.1 trillion cubic feet of recoverable reserves.
Cronos lies in Block 6 of Cyprus’ exclusive economic zone and is jointly operated by Italy’s Eni and France’s TotalEnergies, each holding a 50 per cent stake. Rather than developing standalone export infrastructure, the partners plan to route production to Egypt, taking advantage of the country’s underutilised gas-processing and export facilities.
The Cypriot gas will be transmitted through an undersea 90-km pipeline from Cronos to the Eni-operated Zohr Field in the Mediterranean, then to the liquefaction plant at Damietta, which has a capacity of around five million tons per year, to be re-exported to Europe.
According to the Middle East Economic Survey (MEES), a leading regional oil and gas industry publication, this approach will allow Cypriot gas to enter international markets more quickly and at lower cost.
Although early announcements suggested Egypt might divert up to 20 per cent of Cronos gas for domestic use, industry sources cited by MEES emphasise that no such provision exists in the current framework and that decisions over gas sales will remain in the hands of the Block 6 partners.
Egypt appears comfortable with this arrangement, in part because additional supplies are expected in the future from Aphrodite, another major Cypriot offshore field. Aphrodite, which could eventually deliver around 800 million cfd, is widely expected to contribute to Egypt’s domestic gas needs, according to MEES.
Taken together, these developments underscore Egypt’s expanding role as a regional gas hub, as it seeks to offset domestic supply constraints while positioning itself as a re-export centre for Israeli and Cypriot gas using its existing LNG infrastructure.
* A version of this article appears in print in the 29 January, 2026 edition of Al-Ahram Weekly
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