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Egypt gas sector activity surges amid regional conflict

7 April 2026

 

There is a surge of activity in Egypt’s gas sector as investors pour money into boosting domestic production and the country makes deals to leverage its existing liquefied natural gas (LNG) export infrastructure.

The increase in activity has come as the disruption to shipping through the Strait of Hormuz continues to prevent the shipment of around 20% of the world’s LNG supplies to consumer nations.

While Egypt remains a net importer of natural gas, its geographical position, significant gas reserves and existing infrastructure, including two LNG export terminals, mean it can potentially capitalise on the current supply crunch.

Harmattan development

On 6 April, Arcius announced the final investment decision (FID) to develop the Harmattan gas field offshore Egypt.

Arcius is a joint venture between UK-based BP and the UAE’s Adnoc, focused on developing gas assets in Egypt and the wider Eastern Mediterranean.

The company acquired the El-Burg offshore concession area, which includes the Harmattan field, in February.

An engineering, procurement, installation and commissioning (EPIC) contract for the project has been awarded to Egypt’s Enppi, while Cairo-based Petrojet and Petroleum Marine Services (PMS) have been awarded work as subcontractors.

In a statement, Naser Al-Yafei, the chief executive of Arcius, said: “The FID to develop the Harmattan field marks an important milestone in advancing one of our first projects in Egypt toward production.”

Idku LNG

UK-based Shell also held a meeting with Egypt’s Petroleum Minister Karim Badawi recently, with talks focusing on increasing domestic natural gas production and utilising the Idku LNG export terminal.

The terminal has a nameplate capacity of 7.2 million tonnes a year, but is not currently operated at full capacity.

The Idku facility is owned by a consortium of companies, with Shell and Malaysia’s Petronas holding the biggest stakes.

Gas corridor

On 30 March, Egypt signed a natural gas cooperation agreement with Cyprus, laying the groundwork for a regional gas corridor that will allow Nicosia to transport its gas to Egypt to use its export infrastructure.

The signing ceremony took place on the sidelines of a conference in Cairo, where both parties agreed to cooperate on the development and exploitation of gas resources.

The text of the agreement focused on technical and commercial aspects of the deal, establishing a basis for future negotiations.

Under the agreed terms, Cyprus’ gas will be processed in Egypt’s liquefaction facilities before being shipped to export markets.

The agreement built on a memorandum of understanding (MoU) signed in February last year, in which Egypt agreed to buy gas from Cyprus’ Aphrodite field.

Block 6

It is also expected that Italy’s Eni, which operates Cyprus’ Block 6 concession with France’s TotalEnergies, will announce FID for the development of the Kronos field in the coming weeks.

The field has reserves of 3.1 trillion cubic feet and, under current plans, the field’s gas will be transported to Egypt via pipeline before being exported from Egypt’s Damietta LNG terminal.

Future investment

As a net importer of natural gas, Egypt faces short-term economic problems due to the current high-price environment, forcing the country to pay more for energy imports.

While this is a major setback for the country and is likely to erode its foreign currency reserves over the coming months, the current global shortage of natural gas could lead to increased investment in the country’s oil and gas sector.

This could accelerate existing project plans within the sector as well as the development of new projects.

READ THE APRIL 2026 MEED BUSINESS REVIEW – click here to view PDF

Economic shock threatens long-term outlook; Riyadh adjusts to fiscal and geopolitical risk; GCC contractor ranking reflects gigaprojects slowdown.

Distributed to senior decision-makers in the region and around the world, the April 2026 edition of MEED Business Review includes:

> GCC CONTRACTOR RANKING: Construction guard undergoes a shift
To see previous issues of MEED Business Review, please click here
https://image.digitalinsightresearch.in/uploads/NewsArticle/16280782/main.jpg
Wil Crisp

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