Explainer| Why does Egypt export gas it does not have?

In recent weeks, Egypt has signed two new agreements to export natural gas to Syria and Lebanon. These follow closely on the heels of Cairo’s resumption of gas exports to Europe in October. Meanwhile, Egypt’s energy import bill continues to climb, raising a pressing question: why is the country exporting gas while still importing costly fuel, particularly under a long-term deal with Israel?

In the public imagination, exports imply surplus; an excess of supply after domestic needs are met. As the saying goes, “charity begins at home.” But Egypt’s gas policy defies that logic. The country has spent much of the past decade importing gas to meet local demand, even as it has expanded its export operations abroad.

Are we exporters or importers?

Technically, Egypt has been a net importer of gas since 2015. That is, the value of its gas imports has exceeded the value of its exports. It briefly exited this category after the discovery of the massive Zohr gas field in 2018, but since 2023, Egypt has once again become a net importer.

Interruptions in Israeli gas exports to Egypt—often triggered by successive Israeli military assaults on Gaza—have intensified domestic shortages. Power outages have become increasingly common, and energy-intensive industries have seen repeated disruptions in gas supply. Under this pressure, Egypt halted gas exports for a period. These disruptions prompted Egypt to halt exports for a time and seek more stable sources.

To meet demand, the government turned to the international liquefied natural gas (LNG) market. But LNG cannot be consumed directly, it must be regasified aboard floating storage and regasification units. In 2024, Egypt began leasing these vessels.

The costs are steep. LNG is far more expensive than domestically extracted gas or gas piped in via overland infrastructure. As a result, Egypt’s petroleum import bill soared to a record high—$19.5 billion in the 2024–2025 fiscal year.

So why are we exporting?

Paradoxically, Egypt is grappling with a severe energy deficit even as it increases exports. The country produces around 4.2 billion cubic feet per day (bcf/d) of gas—well short of its 6.2 bcf/d daily demand. That 2 bcf gap must be filled through costly imports.

Despite this, Egypt resumed exports to Europe and moved to expand into new markets in Syria and Lebanon. According to an official at the Ministry of Petroleum, who spoke to Al Manassa on condition of anonymity, these export volumes remain modest when compared to Egypt’s $7.2 billion LNG import bill in 2025. Still, the policy is driven less by surplus and more by strategic and financial considerations.

With $4 billion to $5 billion in unpaid debts to foreign energy companies—according to 2024 IMF estimates—Egypt is using export deals to reassure investors and boost local production. Exports, particularly to Europe where prices are higher, offer foreign firms attractive margins and incentives to keep investing despite financial uncertainty at home.

There are also geopolitical motives. The official confirmed that Egypt aims to support Syria and Lebanon by supplying gas via the Arab Gas Pipeline, which is cheaper than sending LNG. A recent Arab News report revealed that Syria will receive Egyptian gas in exchange for waiving transit fees on flows to Lebanon. Egypt will also regasify LNG shipments and send the converted gas to Syria through overland pipelines.

The storage dilemma

Infrastructure constraints add another layer of complexity. Egypt lacks sufficient gas storage capacity, making it difficult to hold surplus gas for future domestic use.

“Egypt’s gas storage is limited to shallow-surface tanks and can only accommodate relatively small volumes,” said the source at the petroleum ministry. “The cost of storing LNG is also prohibitively high—ranging from $1 to $2 per million BTU—so we can only afford to store gas for three to five months, at most.”

This becomes especially problematic in winter, when domestic demand drops. With no cost-effective way to store the excess, exporting becomes the only viable option—even if that gas will be needed during peak summer months.

The irony is that Egypt’s most significant energy infrastructure investments—the liquefaction plants in Edku (2003) and Damietta (2006)—were designed with export, not storage, in mind. Built to transform Egypt into a regional gas hub, these plants were intended to process both local gas and imports from neighboring countries, particularly Israel.

But their tanks are built for short-term operational use only, sufficient for just a few days or weeks of supply—not for long-term seasonal balancing, the official explained.

Looking ahead: Israel or Qatar?

Egypt is not just exporting more gas—it’s also diversifying its import sources. Most notably, Cairo has amended its long-term gas import agreement with Israel, extending it to 2030, and has launched negotiations with Qatar for additional LNG.

The petroleum ministry official confirmed that Israeli gas is currently Egypt’s most cost-effective option, delivered via pipeline at rates possibly half the price of LNG from countries like Qatar. Egypt imports around 1 bcf/d from Israel.

However, Cairo is also keen to avoid overreliance on a single source—especially one as politically volatile as Israel. Diversifying through Qatari LNG offers a buffer against future supply shocks or geopolitical tension.

In December, Israeli PM Benjamin Netanyahu announced final approval of the amended gas deal. But according to MEES, a leading energy industry publication, as of January 9, the deal had yet to be implemented due to disagreements between Cairo and Tel Aviv over key terms.