Cairo: Egypt is in advanced talks with some of the world's largest energy companies to secure long term supplies of liquefied natural gas as the country faces growing pressure from declining domestic gas production and rising electricity demand.
According to people familiar with the negotiations, Egypt is discussing multi year supply agreements with global energy firms including Shell, TotalEnergies, BP and energy trader Hartree Partners. The proposed contracts are expected to cover between 15 and 18 LNG cargoes each month for a period of three to five years. Although the talks are progressing, the agreements have not yet been finalized and the exact terms are still being negotiated.
The move marks an important change in Egypt's energy policy. Only a few years ago, the country was considered a major natural gas exporter after the discovery of the giant Zohr gas field in the Mediterranean Sea. However, gas production has fallen steadily in recent years while demand for electricity has continued to increase because of population growth, industrial activity and the heavy use of air conditioning during the hot summer months.
Government estimates show that Egypt imported around 985 billion cubic feet of natural gas during the financial year that ended in June 2026. Imports are expected to rise further to more than 1 trillion cubic feet during the current financial year. At the same time, domestic gas production is forecast to fall from less than 4.4 billion cubic feet per day to about 4.2 billion cubic feet per day, widening the gap between supply and demand.
To avoid electricity shortages, the government has increasingly turned to imported LNG. Officials believe that securing long term contracts will provide greater certainty over fuel supplies while reducing the country's dependence on the highly volatile spot market, where prices can change sharply because of global events.
The negotiations are taking place against a backdrop of continued geopolitical tensions in the Middle East. The recent conflict involving the United States, Israel and Iran has created uncertainty in global energy markets and raised concerns about shipping through the Strait of Hormuz, one of the world's most important routes for oil and natural gas exports. These developments have encouraged many countries to secure long term energy supplies instead of relying on short term purchases.
Energy market analysts say Egypt's strategy reflects a broader trend among energy importing nations seeking stability in an increasingly uncertain market. By combining long term LNG agreements with increased pipeline gas imports from neighboring countries, Egypt hopes to strengthen its energy security and reduce the risk of supply disruptions.
The proposed LNG agreements are also expected to represent a major financial commitment. Industry sources estimate that the contracts could cost between 8 billion and 11 billion dollars each year, depending on global gas prices. While this would place additional pressure on Egypt's public finances, officials see the investment as necessary to maintain reliable electricity supplies and support economic activity.
The country has already taken several steps to strengthen its energy position over the past two years. Earlier agreements with international suppliers, including Shell and TotalEnergies, secured dozens of LNG cargoes to meet immediate domestic needs. Egypt has also expanded cooperation with QatarEnergy and continues to import pipeline gas from Israel as part of its broader energy strategy.
At the same time, the government is encouraging international energy companies to invest in exploration and production projects in the hope of increasing domestic output over the coming years. Officials believe that boosting local production remains the best long term solution, but acknowledge that imported LNG will continue to play an important role until new gas discoveries are developed.
The outcome of the current negotiations will be closely watched by energy markets across the region. If the agreements are completed, they will provide Egypt with a more secure and predictable supply of natural gas for several years while helping the country meet growing electricity demand. The deals would also underline how changing energy markets and geopolitical uncertainty are reshaping the global trade in liquefied natural gas.