Foreign Companies, Including Shell, Pledge $1.6 Billion to Boost Egypt's Natural Gas Output

Major Investment to Bolster Egyptian Gas Production

A consortium of foreign oil companies, prominently featuring Shell, has committed to investing $1.6 billion in Egypt's natural gas sector during the current fiscal year. This substantial financial commitment is projected to significantly enhance the country's natural gas output, with an anticipated increase of approximately 510 million cubic feet per day (MMcf/d). The investment underscores Egypt's growing appeal as a key energy player in the region and its strategic efforts to meet escalating domestic demand and strengthen its position as a regional energy hub.

Key Projects and Strategic Fields

The planned investments will target both offshore and onshore sites, with a particular focus on the vital Burullus and North Sinai fields. Specific projects contributing to this boost include the 12th phase of Shell's Burullus deepwater field and the fourth phase of the Anglo-French North Sinai project. Beyond these, Shell has also made significant individual commitments, such as a $1.2 billion investment in the North Marakia offshore block, which is expected to commence initial production in the fourth quarter of 2026 and reach peak capacity by the third quarter of 2027. Additionally, Shell, in partnership with KUFPEC (Egypt) Limited, has taken a final investment decision to develop the Mina West gas field in the Mediterranean Sea, discovered in October 2023.

Egypt's Energy Ambitions and Growing Demand

This influx of foreign capital is crucial for Egypt, which has seen its domestic gas demand grow by a remarkable 6.5% annually between 2019 and 2024. This growth has led to supply challenges, including a 28% decline in Egypt's LNG exports in 2024 due to domestic shortages. The Egyptian government aims to increase its daily natural gas production by 30%, targeting 6 billion cubic feet per day by the end of 2025, up from the current 4.6 billion cubic feet per day. To further encourage investment, the government has been actively addressing arrears owed to foreign companies, a move seen as vital for fostering a stable investment climate.

Industry Perspectives and Future Outlook

Officials from both the Egyptian government and international energy firms have highlighted the strategic importance of these investments. Waleid Gamal Eldein, CEO of the Egyptian Natural Gas Holding Company (EGAS), noted that such projects are 'critical for closing Egypt's supply-demand gap while maintaining export commitments,' representing 'a strategic alignment of international investment and national energy security.' Dalia Elgabry, Vice President and Country Chair of Shell Egypt, emphasized that investing in new production 'expands our industry-leading integrated gas business and supports delivery of secure, reliable energy to Egypt's domestic market.' These investments are expected to play a pivotal role in Egypt's journey towards enhanced energy self-sufficiency and its aspiration to become a significant regional energy hub.