Back to the complete issue
Monday, 4 February 2019

Egypt is leading the region’s decline in liquefied natural gas demand

Egypt’s emergence as a regional gas hub is driving a decline in regional demand for liquefied natural gas, writes Verity Radcliffe for Bloomberg. While Egypt was the region’s biggest LNG importer in 2016 and 2017, we are now on track to become a significant exporter this year after several gas discoveries allowed us to pull the plug on LNG imports last September. The switch from being a net importer to becoming a net exporter positions Egypt among the main reasons for the regional turnaround from a two-year demand surge that outpaced global growth between 2014 and 2016 to a rapid reduction of 37% last year.

So what can regional and global LNG markets expect? “The Middle East is now expected to make up less than 4% of global imports for at least eight years,” Radcliffe said. Last year, almost half of Egypt’s LNG imports came from Qatar, the world’s biggest exporter of the commodity. They are unlikely to feel much pain from our absence, however, as global LNG demand is expected to grow at more than double the rate of supply — especially in Asia, which accounts for well over half the LNG demand worldwide. Jordan is also expected to increase its reliance on “pipeline imports from Egypt, trimming its need for LNG,” Radcliffe notes. Egypt has begun increasing its natural gas exports to Jordan to 100 mcf/d, with plans to increase further to 250 mcf/d during the summer.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt.