Govt agrees on export share with gas companies to ‘improve cash flows’

A liquid natural gas shipment of 155,000 cubic meters belonging to the British oil giant, Shell, was exported from the Idku liquefaction plant on Egypt’s north coast to Italy, the Petroleum Ministry stated on Monday.

The ministry said the shipment comes as part of a plan to encourage foreign companies partnered with the government in Egypt’s gas fields to boost their investment in exploration and production.

Companies working in Egypt’s gas fields are required to divert all their gas output to the government in times of high national demand for energy supply, such as those that faced the government in recent years.

A delivery price is fixed for such eventualities, but as the government has simultaneously faced a liquidity strain over recent years, it has negotiated with the companies to defer payment of its dues.

The exports from Idku are part of agreements the government reached with companies owed outstanding dues, a former Petroleum Ministry official told Mada Masr. The agreements allow these companies to export a portion of the natural gas produced through their partnerships with the government, in order to generate revenue and ease cash flow pressures caused by the state’s mounting debts.

Government arrears to these companies stood at US$5 billion at the start of the year before falling recently to $3 billion, according to the same source and a government official.

Domestic demand for gas, which typically peaks in the summer months as homes and industries require more energy for cooling, has declined in recent weeks as cooling temperatures have reduced electricity consumption.

Electricity generation accounts for roughly 60 percent of Egypt’s gas use. The decline in demand has coincided with an increase in natural gas imports from Israel, according to the former official.

Economy Plus reported on Tuesday that the government has authorized Petronas and Shell to export two LNG shipments per month over the next five months, with a combined value of $280 million.

Egypt’s LNG exports totaled $60 million in the first half of 2025 — a 79 percent drop from the $281 million during the same period last year, according to data from the Central Agency for Public Mobilization and Statistics.

In recent months, the Petroleum Ministry has sought to reach settlements with foreign companies over delayed payments, saying it aims to encourage exploration, development and production activities to boost domestic output.

Egypt’s domestic gas production has been steadily declining, falling back to pre-Zohr field levels of around 4 billion cubic feet per day as of June, compared to domestic consumption of more than 5 billion cubic feet.