27.05.2025 – Britain.
Once hailed as energy self-sufficient, Egypt now stands on the brink of another electricity crisis. As summer 2025 approaches, the threat of widespread power outages is becoming very real. A mix of declining domestic gas production, tense regional politics, stalled investments, and dwindling revenues from critical sectors like the Suez Canal are fueling the nation’s looming energy emergency.
Zohr Gas Field: From Dream to Decline
Discovered in 2015 and hailed as a game-changer, the Zohr offshore gas field once promised energy independence for Egypt. By 2019, Zohr was producing 3.2 billion cubic feet per day (bcf/d). Today, that number has dropped to just 1.9 bcf/d.
The reasons are multifaceted: water intrusion into wells, depletion of accessible reserves, and delayed field investments due to the government’s inability to pay arrears to foreign operators like Eni.
Although Egypt is now pushing new drilling programs to stabilize Zohr, production is not expected to rise significantly until mid-to-late 2025 — far too late to prevent another summer of blackouts.
Turning Back to Israel: A Risky Reliance
To fill the widening gap, Egypt has ramped up gas imports from Israel. Starting January 2025, imports will increase by 17%, reaching 1.15 bcf/d. This includes a new 46-kilometer offshore pipeline connecting Israel’s Ashdod and Ashkelon hubs with Egypt’s Arish gas terminal, expected to be operational by May.
But this plan is fragile. Israel is demanding a 25% price hike. Technical issues with older infrastructure persist. And there are geopolitical tensions, especially around Gaza. Egypt has rejected Israeli proposals to resettle displaced Gazans in Sinai, complicating already strained energy negotiations.
The LNG Ship Lifeline – at a Cost
To cover shortfalls, Egypt is also in talks to import 40–60 LNG (liquefied natural gas) cargoes this year, a shift from being a net exporter just a few years ago. This could cost the country over $3 billion in foreign currency — a painful burden for a struggling economy.
To manage these imports, Egypt is bringing in a second FSRU (Floating Storage and Regasification Unit), the Energos Eskimo, which is expected to be operational in the summer of 2025. But infrastructure alone won’t fix Egypt’s deeper energy challenges.
The Collapse of the Suez Canal Revenues
Making matters worse, one of Egypt’s key sources of foreign currency — the Suez Canal — has seen revenue plunge. In 2023, it brought in $10.25 billion. In 2024, revenues dropped to just $3.99 billion due to Red Sea security threats, particularly Houthi attacks on commercial shipping routes.
This revenue collapse has crippled Egypt’s ability to pay for fuel, food, and medicine imports, forcing the government to ration power and reconsider subsidies.
Gaza Marine: The Untapped Game-Changer
The Gaza Marine field — with an estimated 1 trillion cubic feet of gas — lies dormant off the Gaza coast. Egypt, along with Qatar and the Palestinian Authority, had hoped to develop the field, but Israel’s security blockade and war with Hamas have put all plans on hold.
If unlocked, Gaza Marine could help diversify Egypt’s gas imports and offer much-needed energy stability, but only if the political climate changes dramatically.
What Egypt Must Decide Before Summer 2025
Egypt faces hard choices in the next few months:
Boost domestic production by fast-tracking investment in Zohr and other fields.
Expand renewables, including solar and wind, to ease gas demand.
Negotiate smarter energy deals with Israel, Qatar, and Turkey — without geopolitical strings attached.
Revive its economy through subsidy reforms, investor confidence, and currency stabilization.
The clock is ticking. The 2025 summer will be a major stress test for Egypt’s energy resilience and political leadership. Whether the lights stay on will depend on Cairo’s ability to act fast — and decisively.
– Eelaththu Nilavan.
27/05/2025
