Egypt Secures LNG Deals with Aramco, Trafigura and Shell to Cut Dependence on Spot Markets

Egypt has secured long-term liquefied natural gas (LNG) supply deals with Saudi Aramco, Trafigura, Vitol, Hartree Partners, BGN, and Shell. The agreements aim to reduce Egypt's reliance on volatile spot markets, but the country's declining local gas production and rising demand will lead to a higher energy bill of around $3 billion a month over the summer.

Egypt has secured long-term liquefied natural gas (LNG) supply deals with Saudi Aramco, Trafigura, Vitol, Hartree Partners, BGN, and Shell. These agreements aim to reduce Egypt's reliance on volatile spot markets, but the country's declining local gas production and rising demand will lead to a higher energy bill of around $3 billion a month over the summer.

The agreements, which were finalized recently, are part of Egypt's strategy to stabilize its energy supply and reduce its exposure to the volatility of the spot LNG market. Egyptian Natural Gas Holding Co. (EGAS) has been actively negotiating these deals to secure long-term LNG cargoes, which will help Egypt meet its growing energy needs [1].

Egypt's decision to shift to long-term LNG deals comes at a time when the country is trying to reboot its economy after emerging from a foreign-currency crisis. The move is also driven by declining gas output from local fields, which is unable to keep up with the increasing demand due to a rising population and rising temperatures [1].

The higher gas requirements mean that Egypt's energy bill is likely to rise significantly. According to a person familiar with the matter, Egypt's energy bill is expected to increase to about $3 billion a month over the summer from July, compared to about $2 billion last year [1]. This increase is due to the higher cost of importing LNG compared to domestic production.

The long-term LNG supply deals are expected to provide Egypt with a more stable and secure energy supply, helping to insulate the country from the volatility of the spot LNG market. However, the higher energy costs will put additional pressure on Egypt's budget and may require the government to implement measures to mitigate the impact on consumers and businesses.

In conclusion, Egypt's decision to secure long-term LNG supply deals is a strategic move aimed at stabilizing its energy supply and reducing its reliance on volatile spot markets. However, the higher energy costs will require the government to implement measures to manage the impact on the economy.

References:

[1] https://www.bloomberg.com/news/articles/2025-06-12/egypt-makes-lng-supply-deals-with-hartree-vitol-aramco-others