On November 20, 2024, Cairo is actively negotiating with U.S. and other foreign companies to secure long-term contracts for liquefied natural gas (LNG). This move aims to reduce Egypt's reliance on the more expensive spot market as the country faces a significant decline in domestic gas production.
Egypt's domestic gas output fell to a seven-year low in September, attributed to decreased production from the Zohr gas field and rising power consumption. Analysts predict a further 22.5% drop in domestic output by the end of 2028, while power consumption is expected to increase by 39% over the next decade.
The Petroleum Ministry is seeking to secure supplies for three to four years, aiming to protect against sudden price hikes. Flexible agreements are also under consideration to adjust the volume of gas as needed.
To address its energy needs, Egypt plans to issue a tender for up to 20 LNG cargoes for the first quarter of 2025. The country has recently experienced rising LNG spot prices, which have increased from around $12 to approximately $14.50 per million British thermal units.
Infrastructure improvements are underway for gas imports in Ain Sokhna and Alexandria. Additionally, Egypt is expected to install a second floating storage regasification unit (FSRU) early next year.
Despite the challenges, Petroleum Minister Karim Badawi reported a production increase of 200 million cubic feet by October 2024, with expectations for further gains by early 2025 from key concessions.