Egypt has finalized deals with multiple energy companies and trading houses to purchase 150–160 LNG cargoes to meet electricity needs through 2026.
These LNG purchases, valued at over $8 billion based on current market prices, will deepen the strain on government finances already stretched by declining gas production and a worsening cost-of-living crisis.
A shortage of hard currency has forced Egypt to delay payments to international oil firms, limiting exploration and reducing oil and gas output.
The agreements include major players such as Saudi Aramco, Shell, Vitol, Trafigura, BGN, SOCAR, and PetroChina.
Of the total cargoes, Egypt plans to use 50–60 to meet this year’s demand, in addition to 75 already acquired earlier in 2024. The remainder will be delivered by the end of 2026.
Each cargo comes at a premium of $0.70–$0.75 above Dutch TTF hub gas prices, with payments deferred for nine months.
Egypt has the option to postpone shipments, while some sellers may supply extra LNG if needed.
Officials from the Ministry of Petroleum and EGAS have yet to comment on the deals.
Since 2022, Egypt has experienced rolling power outages due to dwindling gas supplies. In February, domestic gas production hit a nine-year low.
After briefly becoming a gas exporter, Egypt returned to net importer status last year, cancelling plans to supply Europe and buying dozens of cargoes to meet internal needs.
So far in 2024, Egypt has imported 1.84 million tons of LNG—about 75% of its total projected intake for the year, according to S&P Global Commodity Insights.
source: pgjonline.com
African Energy Council