Egypt seeks long-term LNG deals as energy demand soars

Alamy via Reuters

Egypt is holding talks with global energy companies about securing long-term liquefied natural gas (LNG) supply contracts to meet growing power demands.

“The ministry (of Petroleum) is seeking three or four years of supply to hedge from sudden price increases,” an unnamed source told Reuters.

The country, which recently became a net importer of LNG, has purchased dozens of cargoes this year, driven by reduced production from the Zohr gas field.

The country’s natural gas output hit a seven-year low in September, the report said, citing joint organizations data initiative.

While consultancy Energy Aspects forecasts a 22.5 percent decline in domestic production by 2028, the country’s power demand is expected to grow by 39 percent over the next decade.

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LNG spot prices have climbed to $14.50 per million British thermal units (mmBtu), up from $12/mmBtu when Egypt initially sought LNG cargoes, exacerbating financial pressures amid the country’s ongoing foreign currency shortage.

Egypt is also enhancing its infrastructure at Ain Sokhna and Alexandria, the news agency said. 

Earlier this week petroleum minister Karim Badawi said gas production increased by 200 million feet by October 2024, with 420 million feet per day expected to be added by the beginning of 2025 from Zohr and Raven concessions.