Egypt, a North African country, has secured a whopping $3 billion deal with two oil majors, TotalEnergies and Shell Plc, for liquefied natural gas (LNG) projects aimed at boosting the nation’s gas supply.
Sources familiar with the matter informed Reuters that the deal will help the country secure 60 cargoes of liquefied natural gas (LNG) for 2025.
The trading sources also reported that the cargoes would cover most of Egypt’s LNG demand throughout the year.
Egypt, the most populous Arab country, returned to being a net importer of natural gas in 2023, purchasing dozens of LNG cargoes after a sharp decline in domestic production.
The country had previously aimed to become a key supplier to Europe but shifted focus due to falling output.
Data from the Joint Organisations Data Initiative showed that Egypt’s domestic gas production dropped to a seven-year low in September 2024.
The decline was mainly attributed to reduced output from the Zohr gas field and increased power consumption.
To meet peak summer demand, when electricity consumption rises due to air conditioning, Egypt has relied on spot market LNG purchases, often paying a premium of $1-$2 per million British thermal units (mmBtu).
Rising costs and future outlook for Egypt
Meanwhile, the rising cost of LNG has further strained Egypt’s economy, which is already grappling with a foreign currency shortage.
In 2025, LNG spot prices have averaged over $14 per mmBtu, up from around $12 per mmBtu when Cairo first began tendering for LNG.
In January, Egypt issued a tender seeking four LNG cargoes for delivery between February and March and may issue another later this year, depending on demand, market conditions, and prices, one source said.
Meanwhile, domestic gas output is projected to decline by 22.5% by the end of 2028, according to consultancy Energy Aspects, while analysts anticipate that the country’s power consumption will rise by 39% over the next decade.
