In light of the escalation of the confrontation between Israel and Iran, the Egyptian government is racing against time to secure urgent alternatives to fuel, to avoid comprehensive electrical interruptions that may hit the country this summer, after the Israeli natural gas supplies stopped completely.
Bloomberg reported, quoting informed sources as saying that the Egyptian government is preparing to put a tender this month to import up to one million tons of fuel oil, provided that the delivery operations begin next August.
The move comes after a previous tender for the same purpose, as part of a comprehensive plan to cover the needs of power plants, in light of the escalating military tension that threatens the continuity of gas flow.
The “Levichan” field stops the crisis
Last Friday, Israel directed to stop work in two of its major fields to produce gas -including a field.LeviathanAnd she is the largest- due to security concerns after launching strikes against Iran, and subsequent Iranian threats.
As a result, the gas supplies that Egypt relied heavily stopped, as it covered between 800 million to one billion cubic feet per day of the total deficit of 3.5 billion cubic feet per day, forcing Cairo to reduce the supplies directed to several industrial sectors, which are large, to ensure the continued operation of the power plants.
Power outage
In a televised press conference last Saturday, Prime Minister Mustafa Madbouly said, “We are working hard to fulfill our promise not to cut electricity, but what happened yesterday (Friday) has direct repercussions on a large part of the gas supply for the generation stations.”
He called on citizens to rationalize electricity consumption, considering that this is “essential to avoid current interruptions during the summer.”
From export to import
Until recently, Egypt was a source of liquefied natural gas, but it has now become a clear imported, which cost the country tens of billion dollars of export revenues.
According to Bloomberg, the net of the net Egyptian energy imports multiplied more than twice during the year 2024 to $ 11.3 billion, which contributed to raising the current account deficit to 6.2% of gross domestic productApart from 3.2% in the previous year.
It is expected that Egypt’s monthly energy bill this summer will rise to about $ 3 billion, starting next July, compared to only two billion dollars last year, according to previous estimates.
Temporary austerity measures
Bloomberg reported that the Egyptian authorities decided last Saturday to suspend fuel and diesel oil supplies for some industries for a period of two weeks, to provide up to 9,000 tons of diesel per day in favor of power stations, pending the arrival of imported liquefied gas shipments.
In addition to the ongoing tenders, Egypt concluded huge agreements to import liquefied gas from companies such as “Hartry”, “Vetol” and “Aramco”, and plans to add new floating units to store gas, and talks with Qatar on long -term contracts.
Local production does not meet the demand
Egypt’s local production of natural gas is about 4.2 billion cubic feet per day, while the local demand is approximately 6.2 billion, and reaches 7 billion in the summer months.
The Egyptian Ministry of Health expected temperatures in Cairo to reach 38 degrees Celsius during this week, which increases pressure on the electricity system, especially due to the increase in the use of air conditioners.
“The real problem is that Egypt has become a clear gas importer, and this is unlikely to change in the short term, which makes Israeli gas an essential component of the local energy mix,” said Ricardo Fabini, director of the North Africa project in the International Crisis Group Ricardo Fabini.
He added that the government is trying to encourage foreign companies to explore and increase production, but these endeavors are complicated and their results are not guaranteed, and it may take years to show their effects.