As Egypt braces for sweltering summer temperatures exceeding 40°C, the nation is once again confronting a resurgence of natural gas shortages, threatening to destabilize its already strained electricity grid. With air conditioning demand surging, the government is racing to implement emergency measures to stave off widespread blackouts.
The crisis underscores a deepening paradox: despite Egypt’s aspirations to emerge as a regional energy hub and major LNG supplier to Europe and beyond, it continues to struggle to meet its own domestic energy needs.
Mounting Pressure on Limited Resources
The root of Egypt’s energy dilemma lies in a confluence of economic and structural challenges. Sluggish economic growth, chronic financial instability, and declining foreign investment have all taken a toll on the country’s energy sector. Key production targets are being missed—most notably at the Zohr offshore gas field, once hailed as a cornerstone of Egypt’s gas ambitions, which is now facing persistent technical setbacks. Promised output from other exploration fields has also yet to materialize.
Cairo Eyes Long-Term LNG Imports
To bridge the widening gap between demand and domestic supply, President Abdel Fattah el-Sisi’s administration is expediting efforts to secure long-term liquefied natural gas (LNG) import deals. According to regional reports, Egypt is in advanced negotiations with Qatar for a supply agreement, a key agenda item in recent talks between Egypt’s Petroleum Minister Karim Badawi and Qatar’s Energy Minister Saad bin Sherida Al-Kaabi.
It reports that Cairo is pushing to finalize the deal swiftly, offering Qatar additional investment opportunities in Egypt’s upstream and downstream energy sectors. Sources suggest that QatarEnergy’s current offshore concessions—such as the Nefertari, Masry, and Cairo blocks, jointly operated with ExxonMobil—could be expanded as part of the broader partnership.
In a further sign of deepening bilateral energy ties, QatarEnergy has agreed to acquire a stake in Egypt’s North El Dabaa offshore block alongside EGAS and U.S. energy major Chevron.
Israeli Gas Delays Add to Strain
Egypt’s energy woes have been compounded by unexpected delays in gas imports from Israel. A recently signed agreement was expected to deliver 200 million cubic feet per day starting in mid-May. However, the Israeli side is reportedly seeking revised terms and higher pricing, further complicating Egypt’s supply chain.
The disruption comes despite Israel’s completion of a 46-kilometer offshore pipeline expansion designed to boost daily gas deliveries to Egypt from 1.0 to 1.2 billion cubic feet, intended to feed Egypt’s LNG terminals at Idku and Rosetta.
Emergency Measures and Fuel Oil Rebound
In response, Cairo is pursuing emergency LNG procurement strategies. The government is attempting to secure 14 LNG cargoes from European and U.S. suppliers this month under deferred payment terms. The urgency has been heightened by delays at the Zohr field, where an expected additional 250 million cubic feet per day has been postponed from April until at least August 2025.
To meet short-term needs, Egypt is also preparing to spend up to $7 billion to purchase 155–160 LNG cargoes in 2025, aiming to cap prices at $14 per MMBtu—a challenging goal even amid a downturn in global LNG prices.
Facing budget constraints and surging natural gas prices, Egypt is controversially reverting to fuel oil for power generation. The Egyptian General Petroleum Corporation (EGPC) has issued a tender for 2 million tons of fuel oil to be delivered in May and June. Though environmentally damaging, fuel oil is viewed by Cairo as a necessary stopgap measure to maintain grid stability.
Balancing Act Between Export Goals and Domestic Security
As Egypt struggles to navigate its immediate energy challenges, the broader question remains: can the country reconcile its regional energy ambitions with the imperative of ensuring energy security at home?
Until production stabilizes and long-term supply deals are secured, Egyptians may face another long, hot summer under the shadow of power shortages.