Turning the Tide: Egypt's Roadmap to Energy Stability

Securing Egypt’s natural gas supply has become a top priority for the government in light of the ongoing conflict between Israel and Iran. Following the U.S. strikes on Iranian nuclear facilities and the halt of Israeli gas exports to Egypt, concerns over soaring global gas prices and supply shortages have grown significantly.

These developments are placing immense pressure on the government, as they directly affect power plant operations, industrial productivity, and the depletion of Egypt’s already scarce foreign currency reserves.

A Long-Term Self-Sufficiency Strategy

In response, Prime Minister (PM) Mostafa Madbouly recently outlined a strategic long-term plan to reduce dependence on gas imports. During an inspection of infrastructure preparations in the Ain Sokhna region for liquefied natural gas (LNG) imports, Madbouly revealed that Egypt aims to close the 2–3 billion cubic feet per day gap between domestic gas production and consumption. This plan is designed to gradually reduce Egypt’s need for imported gas and achieve energy self-sufficiency.

Floating Regasification Units to Play a Central Role

Moreover, PM announced that Egypt would increase its reliance on LNG imports through floating storage and regasification units (FSRUs). Currently, one FSRU is operational, with two more expected to be added soon. These vessels convert LNG back into its gaseous state and feed it into Egypt’s national grid, helping meet the rising domestic demand.

Paying Off Debts to Foreign Energy Partners

In parallel, the Petroleum Ministry is accelerating efforts to settle overdue payments to international oil and gas companies operating in Egypt. By clearing outstanding dues, the government hopes to encourage these companies to ramp up exploration and production efforts. This move is seen as critical to boosting supply and maintaining investor confidence in Egypt’s energy sector.

New Exploration Zones Allocated

Additionally, the Ministry has completed the evaluation and awarding of seven new exploration and production blocks to various energy companies. These blocks were offered through Egypt’s digital exploration and production portal and are expected to involve the drilling of multiple new wells. The initiative marks a renewed push to increase upstream activity and unlock new reserves.

A Decade of Gas Production and Consumption Shifts

Egypt’s natural gas production has witnessed significant shifts over the past ten years. Production peaked in 2018 following the discovery of the Zohr field, allowing the country to briefly export surplus gas. However, since 2023, output has declined while domestic consumption has continued to rise, particularly during summer months due to increased demand from electricity generation.

This imbalance between supply and demand reinforces the urgency of Egypt’s new energy strategy, which aims to stabilize the gas market and ensure sustainable energy security despite the turbulent regional landscape.