CAIRO, July 21 – Egypt is in negotiations with several international energy companies, including Shell, TotalEnergies and BP, to secure between 15 and 18 liquefied natural gas (LNG) cargoes per month under long-term supply agreements aimed at addressing the country’s widening natural gas deficit.
According to a Reuters report, citing sources familiar with the discussions, the proposed contracts could run for three to five years, although negotiations have yet to be finalised. Commodity trading firm Hartree Partners is also participating in the discussions.
According to the report, one source familiar with the negotiations said “there is a strong will to work with Americans,” highlighting Egypt’s efforts to diversify and strengthen its long-term energy partnerships.
The talks come as Egypt’s domestic natural gas production continues to decline while electricity demand rises, forcing the government to increase LNG imports to maintain energy supplies.
The country’s energy procurement strategy has also been shaped by tighter global LNG markets following geopolitical tensions in the Middle East, including disruptions linked to the Iran conflict that have affected shipping through the Strait of Hormuz and intensified competition among LNG buyers.
According to Reuters calculations based on recent LNG contracts priced at approximately $1.50 above the Dutch Title Transfer Facility (TTF) benchmark, the proposed agreements could cost Egypt between $8 billion and $11 billion annually.
The additional spending would place further pressure on public finances at a time when the government continues to manage a heavy debt burden and a fragile currency.
Energy analyst Aly Blakeway, Head of Atlantic LNG at S&P Global Energy, said the strategy reflects Egypt’s efforts to reduce exposure to volatile spot markets.
According to Blakeway, “Egypt’s ongoing negotiations for medium-term LNG supply, alongside the expansion of existing and planned pipeline gas agreements, reflect efforts to reduce exposure to volatile spot market procurement amid continued geopolitical uncertainty.”
He added that broader geopolitical risks, including the conflicts involving Russia and Ukraine as well as tensions between the United States and Iran, continue to influence global gas markets.
Official documents reviewed by Reuters show Egypt imported approximately 985 billion cubic feet of natural gas between July 2025 and June 2026, including supplies from Israel and imported LNG cargoes.
Imports are projected to increase further to approximately 1,081 billion cubic feet between July 2026 and June 2027, reflecting continued declines in domestic production despite government efforts to encourage upstream investment and settle outstanding payments owed to international energy companies.
Average domestic gas production fell below 4.4 billion cubic feet per day during the 2025-26 fiscal year and is expected to decline further to around 4.2 billion cubic feet per day in the current fiscal year.
The planned LNG agreements underscore Egypt’s growing reliance on imported gas to meet domestic energy demand while highlighting the broader challenge of balancing energy security with rising fiscal pressures.
