Egypt Faces Deepening Natural Gas Crisis Amid Falling Production
Egypt is grappling with a worsening natural gas shortage, driven by declining domestic production and increased reliance on imports, including from Israel and international liquefied natural gas (LNG) markets. Recent data indicates local production has fallen to approximately 3.6 billion cubic feet per day, while consumption stands at 7.7 billion cubic feet, creating a significant daily deficit that must be covered by imports.
Imports from Israel have remained below one billion cubic feet daily, despite a prior agreement to increase shipments to about 1.8 billion cubic feet during the summer. Egyptian sources attribute this shortfall to regional security developments and delays in infrastructure projects needed to boost exports. International assessments suggest Israel is prioritizing its domestic market needs. Concurrently, Egypt's LNG imports have surged due to rising global prices, with the Ministry of Petroleum aiming to increase shipments to 230 to bridge the production-consumption gap.
Experts estimate the gas import bill could reach $30 billion by June 2027, with 186 LNG shipments costing approximately $11.5 billion by July 2026. To revive dormant or underperforming wells, Egyptian authorities have reportedly allocated around $6 billion to petroleum ministry companies to settle outstanding dues with foreign oil and gas firms. However, Egypt faces challenges in financing the necessary investments for increasing domestic production, which has significantly decreased compared to years when the country exported surplus gas.
Experts warn that increased dependence on international markets makes Egypt vulnerable to price fluctuations and regional instability, as the cost of LNG shipments has risen sharply. The government aims to boost domestic production to 6.6 billion cubic feet per day by 2030, but new discoveries will take years to reach commercial production. In parallel, Cairo is investing about $5.2 billion in refining and petrochemicals this fiscal year to improve refinery utilization and reduce the import bill for petroleum products. Nevertheless, the gas crisis remains Egypt's most urgent challenge: declining local output, high demand, costly and volatile international markets, and insufficient import volumes to cover the shortfall.
