Egypt to stop exporting LNG starting from the beginning of May 2024

In 2018, Egypt largely stopped importing liquefied natural gas, and has transformed from a net importer of gas to an exporter of it since late 2018, thanks to the rapid growth in gas supplies, especially those coming from the Zohr field, which is the largest gas field in the Mediterranean. Gas exports from Egypt increased successively, reaching a maximum of (8 million tons) in 2022.

In June 2022, Egypt signed a memorandum of understanding with the European Union and Israel to increase gas exports to the European Union, with the aim of supplying Europe with Israeli gas through the Egyptian liquefaction stations in Idku and Damietta on the Mediterranean Sea.

However, Egypt’s natural gas exports declined in 2023, and its gas revenues declined by more than $7 billion, recording in 2023 a level of $2.5 billion, compared to $9.8 billion in 2022.

During the months of March and April 2024, Egypt was able to export quantities of liquefied gas approaching 80 thousand tons to European markets. But the situation has changed now, and some sources (including Bloomberg) believe that Egypt is currently studying opportunities to purchase liquefied natural gas from nearby markets, in order to avoid a fuel shortage during the summer of 2024, taking into account the difficulty of this currently in light of the escalation of tension and dangers surrounding liquefied gas shipments coming from the Red Sea.

Recently, press sources reported that the export of liquefied natural gas shipments from Egypt would be halted at the beginning of May 2024. This comes in line with the decision to give priority to meeting the needs of local power stations for natural gas, to be able to meet the high rates of electricity consumption, especially as the summer months’ approach.

Egypt’s current consumption of natural gas amounts to about 6 billion cubic feet per day. However, with the rise in temperatures in the summer months, consumption is expected to range between 6.2 and 6.3 billion cubic feet per day.

In these circumstances, and with the decline in Zohr production from a peak of 2.74 billion cubic feet in the third quarter of 2021 to 2 billion cubic feet currently due to water leakage problems, and with the atmosphere of uncertainty regarding the size of the field’s reserves, Egypt is looking forward to resuming LNG imports in the coming months.

The Egyptian Ministry of Petroleum is also active in expanding search and exploration operations for oil and natural gas by issuing new bids to maximize gas production resources and compensate for the decrease occurring at the level of currently existing fields, especially in the deep waters of the Mediterranean Sea, which Egypt depends on as a major source of natural gas production. With its successful operations off the Nile Delta, Shell will play a major role in offshore drilling operations in Egypt during 2024.