Egypt will stop exporting liquefied natural gas to Europe from the beginning of May

Egypt intends to stop exporting liquefied natural gas (LNG) to Europe from the beginning of May, Al Arabiya TV reported, citing unnamed sources in the Egyptian Ministry of Petroleum and Mineral Resources. According to the information, in March and April, the Arab Republic exported about 80,000 tons to the Old Continent, but these quantities will be redirected to the domestic market.

Authorities are bracing for gas shortages amid a drop in domestic production and an expected summer peak in electricity consumption, much of which is generated by gas-fired plants. In February, Oil Minister Tarek El Molla said such a possibility was being considered.

Due to reduced domestic production and prolonged heatwaves in June 2023, the government introduced a schedule of planned daily power outages. The regime continues to apply after a break during the Muslim holy month of Ramadan.

Egypt is expected to spend up to $120 million a month importing liquefied natural gas, the Enterprise News website reported. Earlier, the specialized business publication reported that the Egyptian authorities have bought at least two shipments that will be liquefied in the Jordanian port of Aqaba and are looking to lease a floating regasification unit (FSRU) to be anchored in the Gulf of Suez.

In early 2020, Israel began supplying blue fuel to Egypt from the Leviathan and Tamar gas fields under a 15-year agreement with the private Egyptian company Dolphinus. The gas imported under this contract is intended for business users in Egypt, as well as for re-export to foreign markets, mainly in Europe.

In 2021, the two countries signed a memorandum of understanding between themselves, and in June 2022 a trilateral memorandum with the European Union to increase the export of blue fuel to the Old Continent, including the export of Israeli gas through the Egyptian Edco liquefaction installations and “Damietta”, which are located on the Mediterranean coast.

In February this year Israel’s Energy Ministry gave the go-ahead to an agreement under which Israel will increase natural gas exports to Egypt from the offshore Tamar field.

Egypt also has the Zohr offshore gas field in the Mediterranean. The discovery of the huge field in 2015 allowed the North African country to position itself as an exporter of blue fuel. However, due to technical reasons, production from Zohr has decreased by eleven percent in the 2022/2023 fiscal year, according to a report by the Ministry of Petroleum and Mineral Resources.