Egypt is in advanced negotiations with several of the world's largest energy companies, including Shell, TotalEnergies, BP and commodities trader Hartree Partners, to secure 15 to 18 liquefied natural gas (LNG) cargoes per month for a period of at least three years, according to three trading and industry sources familiar with the matter, as reported by Reuters on July 21, 2026. The prospective agreements, which could extend to a duration of three to five years, have not yet been finalised. Egypt's petroleum ministry, Shell, TotalEnergies and BP did not immediately respond to a Reuters request for comment, while Hartree Partners declined to comment.
Based on Reuters calculations of recent deals priced at a premium of approximately $1.5 above TTF — the European gas price benchmark — the new import contracts could cost Egypt between $8 billion and $11 billion annually. This represents a substantial fiscal burden for a government already contending with elevated public debt and a national currency that has come under pressure since the onset of the regional conflict. The talks are driven by a combination of declining domestic gas production and sharply rising import costs.
Egypt's natural gas import bill nearly tripled, climbing from approximately $560 million to roughly $1.65 billion in March for unchanged volumes, according to Reuters reporting. The surge in costs has been fuelled by the ongoing conflict involving the United States, Israel and Iran, which has disrupted shipping through the Strait of Hormuz and intensified competition among buyers seeking to lock in supplies in an already tight global LNG market. One of the sources indicated there is "a strong will to work with Americans" among Egyptian negotiators.
On the production side, monthly gas output in Egypt averaged under 4.4 billion cubic feet per day in fiscal year 2025-26 and is expected to decline further to 4.2 billion cubic feet per day in the current fiscal year, notwithstanding repeated government pledges to reverse the trend and recent clearances of arrears owed to foreign energy companies. Egypt imported a total of 985 billion cubic feet of gas between July 2025 and June 2026, including supplies from Israel and LNG cargoes. Imports are estimated to reach 1,081 billion cubic feet between July 2026 and June 2027, according to official documents seen by Reuters.
Aly Blakeway, head of Atlantic LNG at S&P Global Energy, noted that Egypt's 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, including the Russia-Ukraine conflict and U.S.-Iran tensions. Every dollar directed toward LNG and fuel imports reduces funds available for budget expenditure, investment or foreign reserve accumulation — a dynamic that poses an additional challenge for Cairo as it attempts to stabilise its finances amid a prolonged regional crisis. Source: Reuters, reporting by Marwa Rashad in London and Mohamed Ezz in Cairo, with additional reporting by Stephanie Kelly and America Hernandez; editing by Nina Chestney and Jan Harvey.
Source: reuters.com