Until recently, Egypt was preparing itself to become a regional and international headquarters for the liquefaction and export of natural gas, especially after a series of important discoveries. But the matter has turned into something else entirely. Although it is still the only country in the eastern Mediterranean that has the operational capacity to export liquefied natural gas, it has at the same time been forced to increase gas imports to cover local demand.
In this context, there were many reasons and explanations, but the decisive factor was the decline in production from the fields, and the technical problems that limited the production of some fields, in exchange for the growth in local demand, especially in the electricity sector during the summer.
Although open data sources indicate that there is a real crisis in the Zohr field, one of the largest natural gas fields in Egypt, which has led to a significant impact on the volume of production, the government insists that these are just rumours.
Data show a remarkable decline in Egypt's natural gas production over the past three years, as it lost more than a third of its natural gas production. During the period between September 2025 and May 2026, production continued to decline by more than 6.8%.
The matter did not stop at the local production crisis, but also the decline in the volume of imports of natural gas for several reasons, including the exacerbation of the crisis of the Israeli-American war on Iran that broke out in the second quarter of 2026, as the temporary closure of the Israeli Leviathan field for 33 days led to the collapse of Egypt’s imports of Israeli gas by more than 80% during March alone, which forced Cairo to double its dependence on shipments of liquefied natural gas imported by sea by more than 160% in the first half of the year. 2026 compared to the same period in 2025, according to a report by the Energy Research Unit of the Energy Platform.
High price for switching from export to import
According to figures quoted by Reuters from official documents, the average monthly production reached less than 4.4 billion cubic feet per day in the fiscal year 2025/2026, with an expected decline to about 4.2 billion cubic feet per day in the fiscal year 2026/2027.
In contrast, production in September 2026 is about 3.8 billion cubic feet per day, while summer demand reaches about 7.2 billion cubic feet per day. That is, a gap of approximately 3.4 billion cubic feet per day, according to the Al Arabiya Business website.
Egypt's gas imports, including Israeli gas and LNG shipments, reached 985 billion cubic feet between July 2025 and June 2026, and government documents reviewed by Reuters expect imports to reach 1,081 billion cubic feet between July 2026 and June 2027. LNG imports also rose to a record level of 8.92 million tons in 2025, according to Kpler data reported by the platform. Mayes.
These numbers do not mean that Egypt has lost its export structure. The Edco complex includes two lines with a capacity of 3.6 million tons per year each, while the nominal capacity of the Damietta station is 7.56 billion cubic meters per year, according to the Italian company Eni. According to GIIGNL data, the total nominal capacity of the three facilities is 586 billion cubic feet per year.
According to previous figures, the financial toll of this transformation has been exorbitant, as the gas import bill alone is expected to rise by 26% to reach about $10.7 billion in the 2026-2027 fiscal year, while the total energy bill (gas, crude, and derivatives) jumped to $13.44 billion in the first half of 2026 compared to $9.69 billion in the first half of 2025, according to an Associated Press report.
On the other hand, the government is betting on a wave of new discoveries (Narges, Nour, Dennis West-1, Bostan South) and a plan to drill 16 exploratory wells targeting resources estimated at about 6 trillion cubic feet during the current fiscal year, in addition to regional projects to transform Egypt into a corridor for exporting Cyprus gas to Europe starting in 2028, amid increasing competition with Israel and Cyprus for the investments of major companies, according to what the Egyptian Ministry of Petroleum stated.
Domestic consumption...the escalating crisis
Natural gas is consumed in Egypt mainly in the electricity sector, as gas represents about 80% of the operating mix of power generation plants, according to EIA data for the year 2022, in addition to the industrial sector and domestic use. Consumption has gradually risen over the past decade, driven by population growth, industrial expansion and subsidized energy prices, at a time when production growth can no longer keep pace, according to the US Energy Information Administration (EIA).
Estimated data based on the international statistics base of the EIA (US Energy Information Administration) show that Egypt recorded a daily gas deficit of approximately 1.16 billion cubic feet during the year 2024, turning the country into a net importer equivalent to about 473 billion cubic feet (about 13.4 billion cubic meters) in that year alone.
Egypt imported 985 billion cubic feet of gas mainly through Israeli pipelines, in addition to liquefied gas shipments during the period from July 2025 to June 2026. This number is expected to jump to 1.081 trillion cubic feet during the fiscal year 2026-2027, an increase of approximately 9.7%, which reflects a widening gap, not a contraction, despite the wave of new discoveries, according to what Reuters reported.
Latest agreements and production recovery plans
On September 16, 2026, EGAS (the Egyptian Natural Gas Holding Company), announced a plan to drill 16 exploratory wells in the current fiscal year, seven offshore and nine onshore, with potential resources of up to 6 trillion cubic feet.
It was also announced that it was targeting to add 250 million cubic feet per day from the Zohr and West Mina fields before the end of 2026, and to add about 80 million cubic feet per day from the Maliha fields in the Western Desert.
CNN Economic and the Energy Platform indicate that Egypt signed five new research agreements with investments of $240 million to drill 14 wells, and awarded four new sectors with investments of approximately $200 million to drill nine wells, in addition to the North Atoll development contract.
The Egyptian Ministry of Petroleum also stated that it had made nine discoveries in the previous period, including eight gas discoveries, adding reserves estimated at about 2.8 trillion cubic feet. On September 20, 2026, Chevron said that it was placing Egypt among areas to intensify exploration, as part of a global plan to increase the exploration budget by more than 50% compared to 2025, and to drill 20 exploratory wells and five to six appraisal wells during the next year, according to what was reported by the Financial Times report.
At the regional level, Egypt, Greece and Cyprus renewed support for the transportation of Cyprus' gas to Europe via Egypt's facilities. According to Euronews, the Cronos project includes four offshore wells and an undersea pipeline to Egypt, then processing the gas using facilities linked to the Zohr field and liquefying it in Damietta, with an expected start of production in 2028 and a capacity equivalent to about 2.8 million tons of liquefied natural gas (LNG) annually when the planned level is reached.
Risks of disruption to marine facilities and supply chains
Experts in the field of oil and gas believe that the greatest danger facing Egypt is not only military, but rather the danger of the system being concentrated in a limited number of reception, processing and export points, as any disruption in a feeding line, processing unit or coastal facility could reduce the flexibility available, especially in the field of electricity generation.
Also, geopolitical risks overlap with pipelines, as the Energy Platform noted that the month-long shutdown of the Tamar field in October 2023 reduced Israel’s imports to Egypt, and raised the possibility of recurring unrest if the conflict expands. It also warned that Houthi attacks on ships disrupted shipping traffic and affected LNG flows and Suez Canal revenues.
The Mediterranean is also plagued by exclusive economic zone disputes and competition between Türkiye, Greece, and Cyprus, factors that may delay drilling, pipeline laying, or project financing. The European Council on Foreign Relations' analysis concludes that the Idku and Damietta facilities give regional gas flexibility to reach Europe, but political competition, trade restrictions, and changing European demand limit the transformation of this potential into guaranteed exports.
Egypt and Europe: a strategic asset but not a permanent solution
The study of the Bruegel Center, which specializes in international and European economic policies, indicates. The structure of Edku and Damietta could form the basis of a regional gas market, because it allows LNG to be directed to different markets instead of linking the resource to one corridor.
But the same study confirmed that feasibility depends on the availability of a surplus after meeting Egyptian demand, and on prices, financing, and the European transition away from fossil fuels. The European Council on Foreign Relations highlights that Europe has viewed Eastern Mediterranean gas as a way to diversify supplies and reduce dependence on Russia, but it also notes that the abundance of non-Russian liquefied natural gas and maritime disputes complicate the picture.
Therefore, Egypt's value to Europe lies in the flexibility and existing structure, and not in guaranteeing a fixed volume of exports during years of domestic deficit. Here, Cyprus' Kronos gas represents a practical test of this equation: using Egyptian infrastructure may reduce the cost of constructing new facilities and speed up access to markets, but the expected start of production in 2028, and the first need to process and connect the gas, means that the project may not succeed in directly alleviating the expected deficit in 2026/2027.
Edited by: A.J.M
