Egypt’s natural gas production has fallen to its lowest level in over six years amid rising demand due to a scorching summer, according to a report by Bloomberg.
- Egypt’s natural gas production has reached its lowest level in over six years
- The country is facing rising demand and struggling to keep up with energy needs during the scorching summer
- Egypt is now in need of importing liquefied natural gas and mazut fuel oil to address the power cuts
Earlier in May, the country’s output was nearly the weakest since February 2018, based on data from the Joint Organisations Data Initiative.
This decline indicates that Egypt will have difficulty replicating the gas export boom of two years ago and will likely need to rely more on imports of liquefied natural gas.
Egypt used to be a big gas supplier for Europe, but now it’s struggling to keep the lights on at home during the summer. The country needs to import $1.18 billion worth of mazut fuel oil and natural gas to address the ongoing power cuts.
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The country’s daily power consumption has surged to over 37 gigawatts, a 12% increase from last year, resulting in a 4-gigawatt deficit, Prime Minister Mostafa Madbouly announced on Wednesday. To address this shortfall and cut down on energy imports, the government plans to fast-track renewable energy projects.
Although gas currently supplies most of Egypt’s grid needs, the government aims to generate 58% of its electricity from renewable sources by 2040, up from 20% today. However, achieving this goal will require significant funding to upgrade and expand the grid to support the new renewable energy sites.
The country recently secured five out of the 21 LNG cargoes it sought for the summer. Officials have indicated that more shipments may be needed depending on the intensity of the summer heat.
Egypt’s Petroleum Minister Karim Badawi revealed this week that oil and gas production has decreased by up to 25% over the past three years. He attributed this decline partly to rising arrears owed to foreign oil companies, which have stalled exploration and development projects. The government is currently focused on addressing this backlog.
