Egypt Resumes LNG Exports Amid Domestic Energy Demand Surge

Egypt has resumed LNG exports facing rising domestic demand but with uncertain export volumes. Gas production has significantly dropped in 2024 due to aging fields. The government is increasing imports to stabilize energy supply and reduce foreign dependency, while various sectors report mixed economic performance. A roadmap to secure energy independence by 2027 is in place amid these challenges.

Egypt has resumed natural gas exports to its liquefied natural gas (LNG) facilities, responding to rising domestic energy demand. Supplies to manufacturing plants in Damietta and Idku have improved, with hopes of exporting the first shipment from Idku within a year. However, the timing and volume of future exports remain uncertain as Egypt struggles to balance gas supply with increasing local consumption.

Prime Minister Mostafa Madbouly indicated that Egypt relies on imports to meet peak electricity demands during the summer. In 2024, gas production dropped significantly to approximately 49.4 billion cubic meters, down from 59.3 billion cubic meters in 2023, with notable declines attributed to aging fields and soaring local consumption. Consequently, Egypt suspended LNG exports since April 2024, increasing imports by 70% to 14.6 billion cubic meters, incorporating both liquefied and pipeline gas to ensure energy security.

Despite the surge in imports, domestic gas consumption grew moderately by just 1.1%, reaching 62.5 billion cubic meters. The government aims to reduce its petroleum imports by $1.5 billion quarterly from January 2025, reflecting efforts to mitigate foreign energy dependency.

Various sectors maintain growth amid these challenges; for instance, automotive manufacturer Audi reported a €4.2 billion profit drop in 2024 and plans significant layoffs to save costs. Alternatively, Xiaomi experienced a revenue surge of 48.8%, reaching $15.09 billion, largely due to increased interest in electric vehicles, with expectations of continued growth into 2025.

Investment firm Hassana also secured a 40% stake in Birin Al-Mayah, symbolizing expanded collaboration in Egypt’s water sector. The juxtaposition of energy supply challenges and positive business developments illustrates the complexity of Egypt’s economic landscape. With increasing summer electricity demands, officials remain optimistic about balancing import requirements with national production.

Prime Minister Madbouly outlined a roadmap aiming for LNG export resumption by March 2027, focusing on securing energy independence while addressing local demands. Egypt is at a critical juncture as it seeks to align energy production with domestic consumption, which will influence the nation’s economic trajectory in an increasingly competitive global energy market.

Egypt is navigating a critical phase characterized by a resurgence in natural gas exports amid rising local energy demand. The government faces challenges related to production declines but is taking strategic steps to enhance energy stability and reduce foreign dependency. Meanwhile, diverse sectors are adapting to these pressure points, suggesting ongoing economic viability. The government’s roadmap aims for enhanced energy independence while meeting essential local requirements.

Original Source: evrimagaci.org