Cairo fears disruption of gas supplies from Israel
Egypt will stop exporting liquefied natural gas (LNG) starting next month. The official explanation cites “the high consumption of natural gas in the country during the summer months and the need to meet the demands of natural gas-fired power plants.” This is true but only partly: the Egyptian government has for years relied on Israeli gas to meet domestic demand, with surpluses exported to Europe mainly through two liquefaction facilities at Idku and Damietta. Now the war in Gaza, as well as escalating tensions between Iran and the Jewish state, have forced Cairo to change its approach.
Last year, Egypt and neighboring Jordan signed a gas cooperation agreement. It provides for the supply of LNG to Amman from Egypt for storage and, if necessary, the supply of some of this gas back to Egypt through pipelines between the two countries. Saudi pan-Arabian broadcaster Al Arabiya reported that the Egyptian Gas Holding Company (EGAS) has purchased a shipment of LNG, which will later be delivered to a floating storage and gasification facility in Aqaba, Jordan.
According to traders, Egypt’s announced decision will have little impact on prices. On the TTF spot market in Amsterdam, it is treading at €29.50-33.10 per MWh after months of free fall.