Egypt Launches Global Tender for Floating LNG Storage Unit to Strengthen Summer Gas Supplies

Egypt launched an international tender to lease a floating liquefied natural gas (LNG) storage unit as part of its strategy to secure fuel supplies during the summer peak in electricity demand, according to a government official familiar with the matter.

The floating storage unit will have a capacity of approximately 150,000 cubic meters of LNG and will be leased for an initial three-month period, with the option of an extension if required.

The move is intended to enable Egypt to stockpile additional LNG cargoes, ensuring sufficient reserves in case scheduled shipments are delayed or pipeline gas imports from Israel are reduced or interrupted, similar to disruptions experienced during last summer's regional tensions.

Egypt expects to import around 3.9 billion cubic feet (bcf) of natural gas per day during the current summer season.

Of that total, approximately 1.1 bcf per day will be supplied through Israel's Tamar and Leviathan offshore gas fields via pipeline, while the remaining 2.8 bcf per day will arrive as imported LNG cargoes.

Pipeline gas from Israel remains less expensive than purchasing LNG on international markets because it does not require liquefaction and marine transportation.

According to the government official, the floating storage unit could be stationed in the Red Sea near Ain Sokhna Port, where Egypt currently operates three floating storage and regasification units (FSRUs). The vessel is expected to be deployed from June or July through the end of September, when domestic gas consumption reaches its seasonal peak.

The lease is estimated to cost approximately $2.25 million per month.

Egypt forecasts that total natural gas demand will increase by around 10% during the summer of 2026, reaching approximately 7.9 bcf per day in August, compared with 7.2 bcf per day during the same month last year.

Demand from the power sector alone is projected to rise to 5.1 bcf per day, up from 4.85 bcf per day in August 2025.

Power plants are expected to consume virtually all of Egypt's current domestic gas production, which stands at around 3.8 bcf per day, leaving the country increasingly dependent on imports to bridge the supply gap.

The Ministry of Petroleum and Mineral Resources is working with international energy companies to accelerate the development and connection of new gas wells in an effort to offset the natural decline in output from mature fields, estimated at around 100 million cubic feet per month.

The initiative comes after Egypt's domestic gas production fell below 4 bcf per day, prompting the government to intensify upstream investment.

Among the companies expanding their operations is Chevron, which has recently begun drilling new exploration wells in Egypt's western Mediterranean offshore region.

Egypt also plans to continue importing LNG through 2030 while expanding its regasification infrastructure.

The country currently operates three floating regasification vessels at Ain Sokhna with a combined processing capacity of approximately 2.25 bcf per day, alongside the Energos Winter FSRU at Damietta, which can process up to 450 million cubic feet per day.