Egypt has reached agreements with several energy firms and trading houses to buy between 150-160 cargoes of liquefied natural gas (LNG) to cover power demand from now until the end of 2026, industry sources aware of the matter told Reuters.

The gas purchases, costing over $8 billion based on current prices, will add more pressure on government coffers which are already under strain to keep the lights on amid falling gas production and a cost of living crisis.

Egypt’s hard currency crunch has delayed payments to international oil firms, curbing exploration and slowing oil and gas output.

Agreements have been reached with global energy companies and trading houses including Saudi Aramco, Shell, Vitol, Trafigura, BGN, SOCAR, and PetroChina, the sources said.

Between 50-60 cargoes will be used to cover this year’s demand. This is on top of 75 cargoes the country has already purchased earlier this year. The rest will be for deliveries through end-2026.

The cargoes were priced at a premium of $0.70-$0.75 above the gas price at the Dutch TTF hub, with a nine-month deferred payment.

Cairo has the flexibility to defer cargoes and some of the companies have the option to provide Cairo with additional LNG cargoes if needed.

Egypt’s Ministry of Petroleum and the Egyptian Natural Gas Holding Company (EGAS) did not immediately respond to Reuters’ quest for comment.

Over the past two years, Egypt has endured rolling blackouts as natural gas supply fell short of demand. Egypt’s own gas output in February hit its lowest level in nine years.

The world’s most populous Arab country returned to being a net importer of gas last year, buying dozens of cargoes and abandoning plans to become a supplier to Europe as its production tumbled.

Egypt has bought 1.84 million tons (mt) of LNG this year, data from S&P Global Commodity Insights shows. That’s almost 75% of its total for 2024.
Source: Reuters