In the span of a decade, Egypt has undergone a dramatic transformation in its energy landscape, shifting from a burgeoning liquefied natural gas (LNG) exporter to a significant importer. This reversal, driven by declining domestic production and surging energy demand, not only strains Egypt’s economy but also ripples through global LNG markets, potentially tightening supply and elevating prices amid ongoing geopolitical tensions. As Egypt ramps up imports to avert power shortages, the world watches how this North African nation’s energy woes could reshape international trade dynamics.
Egypt’s Energy Mix and Production Over the Last Decade
Over the past ten years (2015-2025), Egypt’s energy sector has been heavily reliant on natural gas, which has dominated the country’s energy mix and power generation. In 2024, natural gas accounted for approximately 81% of Egypt’s electricity production, with the remainder coming from hydropower (6%), unspecified fossil fuels (7%), and a modest 11% from low-carbon sources overall. Total primary energy consumption hovered around 98 million tonnes of oil equivalent (Mtoe) in 2024, following a peak of 101 Mtoe in 2021 and subsequent fluctuations due to economic pressures.
Natural gas production saw a remarkable boom in the late 2010s, largely thanks to the discovery of the massive Zohr field in 2015, which began production in 2017 and contains an estimated 30 trillion cubic feet (Tcf) of reserves. Output surged from about 1.7 Tcf annually in 2015 to a peak of over 2 Tcf (around 70.4 billion cubic meters, or Bcm) by 2021, averaging 2 Tcf per year from 2013 to 2022. This growth enabled Egypt to nearly double its electricity capacity, adding 27 gigawatts (GW) between 2013 and 2022 to meet rising demand from a growing population and industrial expansion.
However, production has sharply declined since 2021, dropping from over 6 billion cubic feet per day (bcf/d) to just 3.5 bcf/d by April 2025—a 30% fall from 70.4 Bcm in 2021 to 49.4 Bcm in 2024. By October 2024, monthly output was only 3.85 Bcm, with projections indicating a continued annual decline of about 0.91% through 2028. Renewables have grown slowly, at an annualized rate of 4.8% over the decade, but remain marginal, lagging behind global averages. Coal consumption, meanwhile, peaked at 3.3 million short tons in 2023 after a decline until 2013, reflecting Egypt’s pivot back to fossil fuels amid gas shortages.
This energy mix evolution highlights Egypt’s vulnerability: while gas discoveries briefly positioned the country as self-sufficient, maturing fields like Zohr and insufficient new investments have reversed gains, forcing a reliance on imports to bridge the gap.
Why Egypt Is Increasing LNG Imports to Keep the Lights On
Egypt’s pivot to LNG imports stems from a perfect storm of declining production, skyrocketing domestic demand, and external disruptions. Domestic gas output has plummeted due to the natural depletion of key fields, including Zohr, exacerbating a supply-demand imbalance. Demand for natural gas, which fuels 81% of power generation, has surged with population growth, industrialization, and extreme weather, and unusually hot summers in 2024 and 2025 triggered record electricity consumption to power air conditioning and avoid blackouts.
In 2024, Egypt resumed LNG imports for the first time in six years, procuring 1.84 million tons (mt) in the first half of 2025 alone—nearly 75% of its total 2024 imports. By mid-2025, the country had agreed to buy up to 160 cargoes through 2026, with plans for 290 more by 2028, costing over $8 billion. This urgency is tied to energy security: without imports, power outages could worsen, as seen during the 2024 heatwaves. Pipeline imports from Israel (808 million cubic meters in October 2024) help, but LNG is essential for flexibility. Geopolitical factors, like the Middle East conflict disrupting Israeli supplies in 2025, have further highlighted vulnerabilities.
Egypt’s LNG Suppliers
Egypt’s LNG imports are sourced from a mix of global majors and traders, reflecting its strategic positioning in the Mediterranean. Key suppliers include Shell, TotalEnergies, Saudi Aramco, Trafigura, and Vitol, with deals securing 60 cargoes from Shell and TotalEnergies alone for 2025 at a cost of $3 billion. The United States has been a major origin, supplying most cargoes via floating storage and regasification units (FSRUs) in 2024. Egypt has upgraded infrastructure in Alexandria and Ain Sokhna, operating three FSRUs to handle increased volumes, and signed a 10-year FSRU deal with Hoegh Evi in 2025.
Investments Needed to Reclaim Exporter Status
To reverse its importer status and resume LNG exports— which peaked at 7.7 million tonnes in 2022 before plummeting to 0.8 million tonnes in 2024—Egypt requires substantial upstream investments. Experts estimate billions in funding for new exploration and development, focusing on offshore fields in the Mediterranean. Attracting foreign direct investment (FDI) from companies like Eni, BP, and Chevron is crucial, necessitating improved fiscal terms, reduced subsidies, and political stability.
Key steps include accelerating new discoveries, enhancing ties with Cyprus and Israel to import and re-export gas (potentially doubling supply via pipelines), and expanding export infrastructure like the Damietta and Idku LNG plants. The government aims to boost production to 5.7 bcf/d by late 2025 through targeted projects, but sustained investment of $10-20 billion over the next decade could enable exports by 2027-2030, depending on global prices and commercial agreements.
Global Market Implications
Egypt’s shift to a net importer is poised to tighten global LNG markets, particularly as demand rises in Europe and Asia. By absorbing cargoes that might otherwise head to Europe, Egypt could drive up prices and strain supplies, especially if Asian demand rebounds. This comes amid a moderate global LNG growth of 9% in 2024, led by U.S. exports, but Egypt’s needs—potentially extending through 2030—could exacerbate tightness during winters. Regionally, it highlights vulnerabilities in the Eastern Mediterranean, where Egypt’s ambitions as a gas hub falter, potentially benefiting competitors such as Qatar and the U.S.
This is yet another example of the lack of investment in developing a country’s reserves, until it is too late, much like Norway’s decision to shut down its natural gas fields and then make a 180-degree turn to become the largest supplier to the EU. Norway was able to make the change because it has enormous hydroelectric capabilities, and Egypt does not have that luxury. Energy security begins at home, and you cannot rely on other countries; therefore, Egypt needs to focus on oil and gas exploration within its borders. It is just one of the reasons that we love our day job in reviewing oil and gas deals in the United States. We can see how investments have made a difference in the United States’ production.
As Egypt navigates this transition, the global energy community must monitor how investments and geopolitics could restore its export prowess—or prolong its import dependency, altering market balances for years to come.
