Egypt’s Summer LNG Rush: Why “Abundant Supply” Is an Illusion

For years, energy analysts have promised that liquefied natural gas (LNG) would be plentiful in 2024 and beyond. Research firms like Wood Mackenzie and Poten & Partners painted a picture of ample supply, softer prices, and a well-fed market where utilities could buy gas without breaking a sweat.

But Egypt’s frantic summer scramble tells a very different story — and it’s one the rest of the world may soon be forced to live through.

When the Gas Stopped Flowing
In June, a sudden halt in gas flows from Israel put Egypt’s electricity supply on edge. The Egyptian General Petroleum Corporation (EGPC) reacted quickly, issuing a tender for 14 fuel oil shipments — roughly 700,000 tons — to keep the country’s power plants running through August.

Fuel oil is dirtier and more expensive than natural gas, but it’s reliable in a pinch. The order looked like a prudent backup plan.

Then came the pivot. Weeks later, Egypt canceled about half of those cargoes — more than 2.2 million barrels — after securing large volumes of LNG from global traders like Trafigura Group and Vitol Group.

From the outside, it might have looked like a confident switch in strategy. Inside, it was a high-stakes race to find cargoes before the summer heat pushed power demand beyond the grid’s limits.

The Realities Behind “Abundance”
Egypt has long turned to LNG when domestic production falls short. But until this summer, it had just one operational floating storage and regasification unit (FSRU) — the Hoegh Galleon in Ain Sokhna.

That changed in July, when the Energos Eskimo and Energos Power were added, tripling the country’s import capacity almost overnight. Without that expansion, Egypt might have been stuck with its fuel oil plan — and a much dirtier, costlier summer energy mix.

Even then, timing was everything. Cargoes had to be negotiated fast, with shipping schedules and port logistics lining up perfectly. This was not a slow, calculated shift; it was a scramble that happened to succeed.

Why Fuel Oil Still Lingers
Fuel oil remains an insurance policy for Egypt’s power sector, but bringing it ashore isn’t simple. Ports in Alexandria, Suez, and Ain Sokhna have limited infrastructure for large-scale unloading and storage.

This summer, three tankers — Clean Sanctuary, Seasalvia, and Dhan Laxmi — sat offshore for weeks before being allowed to discharge. Delays like that mean fuel oil can’t always step in quickly, and LNG needs to arrive at just the right moment to fill the gap.

A Warning Written in Summer Heat
On paper, global LNG production is indeed rising. But Egypt’s experience shows how fragile “abundance” can be in the real world. Supply only matters if it’s in the right place, at the right time, with the infrastructure to handle it.

Egypt went from net LNG exporter to net importer in less than a year. And while its scramble was triggered by regional gas disruptions, the same pressures — extreme weather, shipping bottlenecks, competing bids from other countries — could hit anywhere.

Why This Matters Beyond Egypt
For now, wealthier nations with long-term contracts and robust port facilities may feel insulated. But LNG demand is rising fast — driven by Europe’s shift away from Russian gas, Asia’s surging power needs, and the electrification of new industries.

In that future, even the best-prepared buyers will face moments when cargoes are scarce, prices spike, and delivery windows close overnight. Egypt’s summer isn’t an anomaly — it’s an early signal of how quickly a “plentiful” market can turn tight.

The bottom line: LNG abundance on spreadsheets doesn’t guarantee energy security at the shoreline — not for Egypt, and not for anyone else.