Egypt, like many nations, is grappling with the dual challenges of ensuring energy security and transitioning to a low-carbon future. The country’s energy landscape is currently dominated by fossil fuels, particularly natural gas, which plays a pivotal role in meeting the nation’s growing energy demands. Natural gas plays a complex role in Egypt’s energy transition, paving the way to an environment-friendly future despite facing a number of challenges across the path.
Egypt’s Energy Transition: Navigating a Path Towards Sustainability
Egypt’s energy security is under pressure due to rising domestic energy consumption, a heavy reliance on natural gas for power generation, and the increasing vulnerability of energy supply and demand to climate change. Therefore, the need emerges for Egypt to work diligently on its renewable energy file.
Egypt has been a consistent participant in the COP conferences, aligning its policies with global climate goals. The country has prioritized energy transition, with natural gas serving as a cornerstone of its energy mix. Natural gas currently fuels 60% of Egypt’s energy needs across sectors including electricity, industry, transportation, and manufacturing, Former Minister of Petroleum and Mineral Resources, Tarek El Molla, revealed during the Egypt Energy Show (EGYPES 2024).
This comes amid Egypt’s plans to further diversify the energy mix. Egypt’s energy supply is mainly reliant on fossil fuels. However, as the country plans to have a more sustainable future it faces several challenges due to the imbalance in the energy mix, which has led to electricity shortage more than one time. Therefore, it becomes crucial to walk steadily down Egypt’s energy transition path.
Natural Gas: A Bridge to a Cleaner Energy Future in Egypt
As Egypt is working on transitioning into an energy clean future, the government recognizes the challenges of totally shifting from fossil fuels to renewable resources. Therefore, natural gas emerges as a cleaner and more affordable fossil fuel that allows the country to achieve its energy transition targets based on a feasible plan. This comes as Egypt targets to boost the use of renewables in the energy mix to become 42% by 2035 and to produce 1.5 million tons annually of green hydrogen and related products by 2030.
This comes as natural gas, primarily composed of methane, offers a higher energy density than many other fuels, leading to relatively lower carbon dioxide (CO2) emissions per unit of energy produced, according to the EIA.
Egypt’s total natural gas production reached 45 million tons during 2023. This comes as the country has a number of significant natural gas producing fields, including the Zohr field that was discovered in 2015. Moreover, during 2023, 5 projects for crude oil and natural gas fields have been completed and added to the production map with the aim of producing about 15,000 barrels of crude and condensates per day, and about 144 million cubic feet of gas per day. The total investment cost of the projects is about 307 million dollars.
The Challenges and Opportunities of Natural Gas in Egypt
Despite its advantages, the widespread utilization of natural gas necessitates significant investments in infrastructure development, while also considering the potential impact of price fluctuations on the energy sector. Egypt already owns a powerful natural gas infrastructure that boosts the country’s potential to become a natural gas trading hub. This comes as the country owns two liquefaction plants that enable it to not only transport its natural gas to Europe but also to be a transit country transporting its neighbors’ natural gas to Europe. Moreover, the country is developing its internal natural gas network and pipelines connecting new places to the national gas grid every year.
Furthermore, addressing environmental concerns, such as methane emissions, and exploring carbon capture and storage (CCS) technologies are crucial for ensuring a sustainable path forward. While Egypt currently lacks operational carbon capture projects, the government has taken a proactive stance by initiating a comprehensive two-phase offshore study in the Nile Delta. Additionally, Eni has made a significant investment of $25 million in a pilot carbon capture project at its Southeast Meleiha oil and gas concession.
Egypt’s energy transition is a complex undertaking, requiring a delicate balance between ensuring energy security and mitigating environmental impacts. Natural gas, while a cleaner alternative to coal, presents both opportunities and challenges. As the country strives to increase its renewable energy capacity, natural gas can serve as a bridge, providing a more sustainable energy source in the interim.
