Egypt shipped 80 percent of its liquefied natural gas exports to Europe last year as the continent sought alternatives to Russian gas after the Russian-Ukrainian war..
In June last year, the European Union concluded a framework agreement between the bloc, Israel and Egypt that would allow Cairo to continue delivering “relatively large quantities” of liquefied natural gas shipments to Europe..
Due to the conflict between Israel and Hamas, Chevron in October closed the Israeli Tamar natural gas field amid the military conflict and suspended exports through the Eastern Mediterranean Gas (EMG) pipeline extending from Ashkelon in southern Israel to Egypt..
Gas reserves in the largest Arab country in terms of population are under pressure due to the conflict that broke out on October 7, in light of the decline in gas production this year to its lowest levels in three years. Egypt faces an increasing demand for gas from its population of 105 million people.
The country is suffering from a power outage that began in the summer and extended until October in light of the increasing demand for cooling methods due to heat waves. High summer demand resulted in largely reduced or no exports between May and September.
Despite the resumption of LNG exports in October and November, the institute that prepared the report and other analysts believe that the conflict will continue to put Egypt’s LNG exports under pressure..
The institute said in the report, “With scarce gas reserves and a decline in imports from Israel, the prospects for the European Union receiving more liquefied natural gas from Egypt in the short and medium term seem far-fetched.”“.
The institute added, “The June 2022 memorandum of understanding between Egypt, Israel, and the European Union to commit to increasing supplies is likely not implementable now.”“.
Israeli gas exports to Egypt are part of the Egyptian supply mix and therefore represent support for Egypt’s exports of liquefied natural gas.
Rystad Energy Company reported that Cairo imports about seven billion cubic feet annually of natural gas from the Tamar and Leviathan fields, which helps meet the volume of local demand and the needs of liquefaction stations..
Rystad Energy estimated that Egypt exported 3.7 million tons of LNG between October 2022 and January 2023, with the largest amount being just under one million tons in December 2022..
Data from consulting companies ICIS and Kpler showed that Egypt exported two shipments in October and November, but the volume was approximately less than a third of what Cairo exported in April..
Alex Frawley, a liquefied natural gas analyst at ICIS, said that during the period between October and December 2022, Egypt exported 42 shipments, compared to only two shipments in the same period this year..
Frawley added, “It appears that Egypt’s exports of liquefied natural gas are set to remain low or zero during the winter.”“.
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