As global energy markets continue to adapt to new geopolitical realities, Western energy powerhouses like Chevron, Shell, BP, and Eni are ramping up investments in Egypt’s gas sector, positioning the country to become a central player in the liquefied natural gas (LNG) race.
“Egypt’s unique strategic position with its LNG infrastructure and control of vital transit routes like the Suez Canal and SUMED pipeline gives it a substantial edge in the global energy landscape,” reports Simon Watkins for OilPrice.com.
The importance of LNG surged following Russia’s invasion of Ukraine, which disrupted energy supplies to Europe, pushing Western nations to secure new gas sources.
According to Watkins, “LNG can be bought quickly in the spot market and shipped where it’s needed, offering flexibility that pipeline gas cannot.”Chevron, which already operates massive offshore fields in Israel and Cyprus, is set to expand its footprint in Egypt with the exploration of new gas fields in the northeastern Mediterranean region.
Meanwhile, BP has committed to investing US$3.5 billion in Egypt’s gas fields, with plans to double this if new discoveries are made. Shell, too, is continuing its development of Egypt’s Nile Delta offshore West Delta Deep Marine concession.
The country’s geopolitical significance extends beyond energy. Egypt controls the Suez Canal, a critical global chokepoint through which 10% of the world’s oil and LNG is transported, further solidifying its role in energy security.
Despite facing mounting debt challenges, Egypt continues to receive international financial support, with the IMF extending a US$1.2 billion facility as part of a larger US$8 billion financial aid package.
“Egypt’s ability to pay down its debt deteriorated after the 2022 invasion of Ukraine, but Western support mechanisms remain firmly in place,” Watkins writes, highlighting the importance of continued financial aid to sustain these energy projects.
With global demand for LNG soaring, Egypt is rapidly emerging as one of the key LNG hubs of the future.
