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Israel halted all gas exports to Egypt earlier this month as the war in Gaza disrupts production in the Eastern Mediterranean. In a statement yesterday, the Madbouly cabinet said that the country’s gas imports have fallen to zero from a previous 800 mn cubic feet of gas per day — and named it as one of the main reasons for the worsening blackouts that began a few days ago. Egypt hasn’t imported any gas for several weeks, Cabinet spokesperson Sameh El Khashin said in a televised interview last night (watch, runtime: 9:10).
Field closed, supplies diverted: The war in Gaza had an immediate effect on Egypt’s energy security after Israel ordered Chevron to close its second-largest field, Tamar, a few days into the war. Egypt’s gas imports fell almost 20% following the decision. The following day Chevron announced it had suspended all exports to Egypt via the EMG pipeline and that it would begin routing supplies through the Arab Gas Pipeline that links Israel, Jordan and Egypt. Additionally, gas from the Leviathan field has been diverted away from Egypt, according to Chevron, which said last week that it was prioritizing deliveries to Israel. It said it was still fulfilling part of its contracted shipments to Egypt, without saying how much.
This should be temporary: “Israel informed Egypt of the cessation [in early October] and stressed that stopping work in the Tamar field is only a temporary cessation,” local media previously quoted an Egyptian government official as saying. With the Israeli government preparing for a long war, that might not be anytime soon.
This doesn’t bode well for our ambitions to up LNG exports: Even before the suspension of gas imports, our LNG exports were down heavily on the year due to high seasonal demand and declining gas production. The value of the country’s gas exports fell almost 60% y-o-y to USD 2.3 bn during the first seven months of the year, with hardly any cargoes leaving Egypt since the start of the summer.
Remember: The nationwide power outages that have been ongoing since July have been worse this week, with the Electricity Ministry extending the duration of daily power cuts to at least 90 minutes from one hour previously. The cabinet also blamed declining renewable energy output as well as unseasonably warm weather for the longer blackouts.
